TIDMSRC
RNS Number : 3016U
SigmaRoc PLC
22 November 2023
THIS ANNOUNCEMENT (INCLUDING ITS APPICES) AND THE INFORMATION
CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION
OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR
INTO THE UNITED STATES, AUSTRALIA, CANADA, THE REPUBLIC OF SOUTH
AFRICA, NEW ZEALAND OR JAPAN OR ANY OTHER JURISDICTION IN WHICH
SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BREACH ANY
APPLICABLE LAW OR REGULATION.
THIS ANNOUNCEMENT IS NOT AN ADMISSION DOCUMENT OR A PROSPECTUS
AND DOES NOT CONSTITUTE OR FORM PART OF AN OFFER TO SELL OR ISSUE
OR A SOLICITATION OF AN OFFER TO SUBSCRIBE FOR OR BUY ANY
SECURITIES WHERE SUCH OFFER WOULD BREACH ANY APPLICABLE LAW OR
REGULATION. INVESTORS SHOULD NOT PURCHASE OR SUBSCRIBE FOR ANY
TRANSFERRABLE SECURITIES REFERRED TO IN THIS ANNOUNCEMENT NOR
SHOULD THEY RELY ON THIS ANNOUNCEMENT IN CONNECTION WITH ANY
CONTRACT OR COMMITMENT WHATSOEVER EXCEPT IN COMPLIANCE WITH
APPLICABLE SECURITIES LAWS ON THE BASIS OF THE INFORMATION IN THE
ADMISSION DOCUMENT TO BE PUBLISHED BY THE COMPANY IN CONNECTION
WITH THE PLACING OF ORDINARY SHARES BY THE COMPANY AND THE PROPOSED
ADMISSION OF ITS ISSUED AND TO BE ISSUED ORDINARY SHARES TO TRADING
ON AIM, A MARKET OPERATED BY LONDON STOCK EXCHANGE PLC. BEFORE ANY
PURCHASE OR SUBSCRIPTION OF SHARES, PERSONS VIEWING THIS
ANNOUNCEMENT SHOULD ENSURE THAT THEY FULLY UNDERSTAND AND ACCEPT
THE RISKS WHICH ARE SET OUT HEREIN AND WILL BE SET OUT IN THE
ADMISSION DOCUMENT WHEN PUBLISHED.
COPIES OF THE ADMISSION DOCUMENT WILL, FOLLOWING PUBLICATION, BE
AVAILABLE DURING NORMAL BUSINESS HOURS ON ANY DAY (EXCEPT
SATURDAYS, SUNDAYS AND PUBLIC HOLIDAYS) FROM THE REGISTERED OFFICE
OF THE COMPANY AND ON THE COMPANY'S WEBSITE.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF THE MARKET ABUSE REGULATION (EU) NO. 596/2014 AS IT FORMS PART
OF UK LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS
AMED.
22 November 2023
SIGMAROC PLC
(" SigmaRoc ", the " Company " and, together with its
subsidiaries, the "Existing Group ")
Acquisition of the Deal 1 Targets from CRH
Entry into Call Options in respect of the Call Option
Targets
Placing of, in aggregate, up to 421,052,631 new Ordinary Shares
at 47.5 pence per share
REX Intermediaries Offer of, in aggregate up to 10,526,315 new
Ordinary Shares at 47.5 pence per share
Reverse Takeover
Suspension of Trading
Admission of the Enlarged Share Capital to trading on AIM
and
Notice of General Meeting
SigmaRoc, the AIM quoted lime and limestone group, is pleased to
announce that it has today entered into an agreement pursuant to
which it has conditionally agreed to acquire certain European lime
businesses from CRH plc ("CRH"), a global diversified building
materials business, that CRH has deemed non-core comprising of
standalone businesses in Germany, Czech Republic and Ireland (the
"Deal 1 Targets").
The Deal 1 Targets comprise: (i) the entire issued share capital
of Fels Holding GmbH including its fully owned (direct or indirect)
subsidiaries Fels-Werke GmbH, Fels Netz GmbH and Fels Vertriebs und
Service GmbH & Co. KG (together, the "German Target") from the
German Seller; (ii) 75% of the issued share capital of Vápenka Vito
š ov s.r.o. (the "Czech Target") from the Czech Seller; and (iii)
the entire issued share capital of Clogrennane Lime Limited (the
"Irish Target") from the Irish Seller.
In addition, the Company has entered into the Call Options
pursuant to which, subject to certain conditions, it has been
granted the right (but not the obligation) to acquire, separately,
the Deal 2 Target (the UK Target) and the Deal 3 Target (the Polish
Target), being the UK and Polish lime operations of CRH. The assets
and businesses which will in due course constitute the UK Target
and Polish Target are at present integrated within other CRH
businesses and need to be carved out into standalone entities
before they can be acquired. Subject to the Company exercising the
relevant Call Option, the Company currently expects to complete the
acquisition of the UK Target and the Polish Target by 28 March 2024
and 30 September 2024, respectively.
The Targets (being both the Deal 1 Targets and the Call Options
Targets) are part of the CRH group, a leading provider of building
materials solutions with c. 75,800 employees across 29 countries.
The Existing Group as enlarged by the Deal 1 Targets and Call
Option Targets emerges as one of the largest lime producers in
Europe.
Consideration payable
Deal 1 Targets
The total consideration payable by SigmaRoc for the Deal 1
Targets only is EUR745 million (c GBP645 million) (including
c.EUR211.5 million in connection with the assignment of the German
Intercompany Loan Receivables) (subject to customary adjustments in
respect of the target entities' net debt and working capital
position as at 1 January 2024).
The consideration for the Deal 1 Targets, following customary
purchase price adjustments, will be satisfied by a combination of
EUR230 million (c.GBP200 million) from the gross proceeds of the
Placing, the drawdown of EUR350 million (c. GBP300 million) under
new EUR750 million banking facilities (the "New Facilities"), EUR75
million (c.GBP65 million) of deferred consideration.
The Call Option Targets
The Call Options have been granted to the Company for nil
consideration. The aggregate consideration payable by the Company
pursuant to the Call Options (if both are exercised) is c.EUR255
million (c.GBP220 million).
All Targets
In the event that both Call Options are exercised, the total
consideration payable by SigmaRoc for all of the Targets is c.EUR1
billion (c.GBP870 million).
The consideration, following customary purchase price
adjustments, will be satisfied by a c.EUR230 million (c.GBP200
million) equity raise, c.EUR175 million (c.GBP155 million) of
deferred consideration, with the balance c.EUR505 million (c.GBP435
million) to be financed via debt.
The Fundraising
The Company intends to raise c.GBP200 million (before expenses)
via the issue of up to 421,052,631 new ordinary shares of GBP0.01
each in the capital of the Company (" Ordinary Shares ") at a price
of 47.5 pence per share (the " Placing Price ") (the " Placing ").
Of the Placing Shares, up to 10,526,315 will be made available
through the REX Intermediaries Offer (see below).
As part of the Placing, a CRH Group company intends to
conditionally subscribe for Placing Shares.
In addition, the Directors intend to subscribe for, in
aggregate, 831,577 Placing Shares in the Placing.
The Company values its retail investor base and will therefore
be providing its existing shareholders who cannot participate in
the Placing the opportunity to participate on the same terms as
other subscribers in the Placing, via the REX Intermediaries Offer
(the "REX Intermediaries Offer"). The REX Intermediaries Offer is a
separate offer and will launch shortly hereafter, pursuant to a
separate announcement.
Shareholder approval
Due to its size, the acquisition of the Deal 1 Targets comprises
a reverse takeover of the Company pursuant to Rule 14 of the AIM
Rules for Companies and completion of the Deal 1 Acquisition is
therefore conditional on, inter alia, the approval of Shareholders
at the General Meeting.
In accordance with Rule 14 of the AIM Rules for Companies, the
Company's Ordinary Shares will be suspended from trading on AIM
with effect from 7:30 a.m. today. The Company's Ordinary Shares
will remain suspended until such time as either an admission
document is published, expected to be on Thursday 23 November 2023,
or an announcement is released confirming that the Acquisitions are
not proceeding.
The exercise of each of the Call Options (and subsequent
acquisitions of each of the Deal 2 Target and the Deal 3 Target) is
not expected to comprise a reverse takeover of the Company pursuant
to Rule 14 of the AIM Rules for Companies. The General Meeting will
be held at 11 a.m. on 11 December 2023 at the offices of
Fieldfisher LLP, Riverbank House, 2 Swan Lane, London, EC4R
3TT.
The Company is also seeking Shareholder approval to adopt a New
Option Plan in order to incentivise the executives and senior
management and align their interests with those of the
Shareholders. The exercise price per New Option is proposed be set
at 60 pence. The New Options are expected to vest and become
exercisable on the third anniversary of grant and remain
exercisable until the tenth anniversary subject to the terms of the
New Option Plan. Further information on the New Option Plan is set
out below.
Further information on Targets is set out in the Further
Information section below.
Transaction Highlights:
-- The Acquisitions are expected to be earnings enhancing in the
first full year post completion, assuming exercise of the Call
Options.
-- Assuming exercise of the Call Options: pro forma underlying
revenue surpasses GBP1 billion in FY22, with underlying EBITDA at
GBP211 million, Operating in 14 countries with minerals reserves of
c.2.7 billion tonnes, the Existing Group as enlarged by the Deal 1
and Call Option Targets emerges as the largest lime producer in key
Northern European markets, namely Finland, Sweden, Norway, the UK
and Ireland.
-- Upfront consideration of EUR825 million and EUR175 million
deferred consideration financed through a combination of EUR505
million from the New Facilities, EUR230 million ordinary equity
raise and purchase price adjustments.
-- The Placing is being conducted through an accelerated
bookbuild process which will be launched immediately following this
announcement in accordance with the terms of conditions set out in
Appendix III to this announcement. Liberum Capital, Peel Hunt,
Redburn, BNP Paribas and Santander are together acting as joint
bookrunners (the "Joint Bookrunners") to the Placing. Liberum
Capital is also acting as Nominated and Financial Adviser to the
Company . Munegu Partners is acting as Lead M&A Adviser.
-- The net proceeds of the Fundraising will be used to part
satisfy the cash consideration due on Deal 1 Completion.
-- As part of the Placing, a CRH Group company intends to
conditionally subscribe for Placing Shares.
-- Certain Directors of SigmaRoc intend to participate in the
Fundraising for c.GBP395,000 in aggregate, respectively, of Placing
Shares in the Placing at the Placing Price. Other senior management
intend to participate for c.GBP555,000 in aggregate, respectively,
of new Ordinary Shares in the Placing at the Placing Price.
Benefits of the Acquisitions:
-- The Acquisitions represent an opportunity to become Northern
Europe's leader in lime, combining high quality businesses and
complementary footprints with pro forma FY22 revenue of GBP1
billion and underlying EBITDA of GBP211 million (assuming exercise
of the Call Options). Following the Acquisitions, the Enlarged
Group will be positioned as either the number one or number two
participant of the lime market in all of its key markets.
-- The Targets, together, have an excellent and consistent
performance track record delivering FY22 revenue of EUR579.7
million and EBITDA of EUR133.7 million and EBITDA margin in excess
of 20 per cent. The Acquisitions are expected to be earnings
enhancing in the first full year of ownership subject to the Call
Options being exercised.
-- The Acquisitions are expected to deliver revenue growth
opportunities and cost synergies resulting in at least EUR30
million of EBITDA contribution by the end of 2027. Revenue
opportunities include expansion into adjacent applications and new
geographic markets including entry into the Baltic region. Cost
synergies are anticipated to be realised from site network
optimisation, operational improvements, savings from procurement
and SG&A.
-- CRH and SigmaRoc will cooperate in future through reciprocal
supply agreements across several mutually strategic sites in the
UK, Ireland and Poland, providing both parties with the long term
benefits.
-- The lime market is expected to continue to grow and to be
worth EUR1.9 billion in 2031 across the Enlarged Group's markets.
This is expected to be driven by increased demand from the
construction and steel industries as well as a move towards greener
industrial processes for which lime is a key input.
-- Lime and limestone are key resources in the transition to a
more sustainable economy and lime products are natural carbon
sinks. New applications for lime and limestone products as part of
a drive for sustainability include the production and recycling of
lithium batteries as part of increasing electrification, the
decarbonisation of construction including though substitution of
cementitious material, and new building materials, and
environmental applications including lake liming, air pollution
control and direct air capture.
-- SigmaRoc has built a track record of acquiring and improving
asset-and-reserves-backed businesses, successfully delivering both
organic and external growth. This has been shown through the
Existing Group's long-term growth track record with EBITDA CAGR of
over 80 per cent. and EPS CAGR of over 170 per cent. from FY16 to
FY22.
-- The Enlarged Group is expected to be significantly cash
generative with a targeted cash conversion ratio of c.95 per cent.,
resulting in a free cash flow target for the Enlarged Group in
excess of GBP100 million per annum. The Board believe that
operational efficiencies and cost savings offer the potential to
improve cash generation.
-- The strong balance sheet and cash generation are expected to
enable the Enlarged Group to de-gear at a rate of >0.5x per year
with target leverage of less than 1.0x and EUR180 million of debt
amortised in the first four years post completion of the
Acquisitions (assuming the exercise of the Call Options and
acquisition of the UK Target and the Polish Target). In addition,
the Board will review the potential to divest non-core assets to
further reduce leverage, as it intends the Enlarged Group to focus
on core lime and limestone operations.
-- Further acquisitions are expected to be funded from the
Enlarged Group's resources and the free cash flow generated from
the combined operations. The Board also will, subject to the
circumstances of the Enlarged Group at the time and subject to
their statutory duties, consider paying dividends once leverage
falls below 1.5x.
-- The Targets are aligned with SigmaRoc's ESG and net zero
ambitions and the Enlarged Group will be well positioned to be part
of carbon capture utilisation and storage ("CCUS") hubs and to have
a strategic role in the decarbonisation of key industries such as
steel and chemicals. CCUS hubs are planned in a number of the
Enlarged Group's operating countries and sit alongside the Group's
existing actions including its JV with ArcelorMittal in Dunkirk and
its Aqualung pilot study in Sweden.
Defined and technical terms used throughout this announcement
have the meanings set out in Appendix I to this announcement unless
the context requires otherwise. Appendix II to this announcement
contains certain Risk Factors in relation to the Acquisition and
the Enlarged Group which should be carefully considered.
Information on SigmaRoc is available on the Company's website
at: www.sigmaroc.com .
For further information, please contact:
SigmaRoc plc Tel: +44 (0) 207 002
Max Vermorken (Chief Executive Officer) 1080
Garth Palmer (Chief Financial Officer) ir@sigmaroc.com
Tom Jenkins (Head of Investor Relations)
Liberum Capital Limited (Nominated Tel: +44 (0) 203 100
and Financial Adviser, Joint Bookrunner 2000
and Co-Broker)
Dru Danford / Ben Cryer / Mark Harrison
/ John More / Anake Singh
Tel: +44 (0) 20 7418
Peel Hunt (Joint Bookrunner and Co-Broker) 8900
Investment Banking
Mike Bell / Ed Allsopp / Ben Harrington
ECM Syndicate & Broking
Sohail Akbar / Jock Maxwell Macdonald
/ Tom Ballard
Rothschild & Co acting through Redburn Tel: +44 (0) 20 7000
Atlantic (Joint Bookrunner and Financial 2020
Adviser)
Adam Young / Ben Glaeser
BNP Paribas (Joint Bookrunner and Financial Tel: +44 (0) 20 7595
Adviser) 9523
Tom Snowball / Matt Randall / Lauren
Davies / Deepak Sran
Santander Group (Joint Bookrunner and Tel: +34 912572388
Financial Adviser)
Javier Mata / Oliver Tucker
Walbrook PR Ltd (Public Relations)
Tom Cooper / Nick Rome Tel: +44 20 7933 8780
/ sigmaroc@wallbrookpr.com
Mob: +44 7971 221972
(Nick)
About SigmaRoc plc
SigmaRoc is an AIM quoted lime and limestone group targeting
quarried materials assets in the UK and Northern Europe. It seeks
to create value by purchasing assets in fragmented materials
markets and extracting efficiencies through active management and
by forming the assets into larger groups. It seeks to de-risk its
investments via strong asset backing at its projects through the
selection of projects with strong asset-backing.
IMPORTANT INFORMATION
This announcement and the information contained herein is not
for release, publication or distribution, directly or indirectly,
in whole or in part, in or into the United States (including its
territories and possessions, any state of the United States and the
District of Columbia (the "United States" or "US")), Canada,
Australia, New Zealand, the Republic of South Africa, Japan, any
member state of the EEA or any other jurisdiction where to do so
might constitute a violation of the relevant laws or regulations of
such jurisdiction.
The Ordinary Shares have not been and will not be registered
under the United States Securities Act of 1933, as amended (the "US
Securities Act"), or under the applicable securities laws of any
state or other jurisdiction of the United States, and may not be
offered, sold, taken up, resold, transferred or delivered, directly
or indirectly, in or into the United States, except pursuant to an
applicable exemption from the registration requirements of the US
Securities Act and in compliance with the securities laws of any
relevant state or other jurisdiction of the United States. There
will be no public offering of the Ordinary Shares in the United
States. The Ordinary Shares have not been approved or disapproved
by the US Securities and Exchange Commission, any state securities
commission in the United States or any US regulatory authority, nor
have any of the foregoing authorities passed upon or endorsed the
merits of any offering of the Ordinary Shares, or the accuracy or
adequacy of this announcement. Any representation to the contrary
is a criminal offence in the United States. No money, securities or
other consideration from any person inside the United States is
being solicited and, if sent in response to the information
contained in this announcement, will not be accepted.
This announcement is for information purposes only and does not
constitute an offer to sell or issue, or the solicitation of an
offer to buy or subscribe for, securities in the United States,
Canada, Australia, New Zealand, the Republic of South Africa,
Japan, or in any jurisdiction in which such offer or solicitation
is unlawful. This announcement is not for publication or
distribution, directly or indirectly, in whole or in part, in or
into the United States, Canada, Australia, New Zealand, the
Republic of South Africa or Japan, nor in any country or territory
where to do so may contravene local securities laws or regulations.
The distribution of this announcement (or any part of it or any
information contained within it) in other jurisdictions may be
restricted by law and therefore persons into whose possession this
announcement (or any part of it or any information contained within
it) comes should inform themselves about and observe any such
restriction. Any failure to comply with these restrictions may
constitute a violation of the securities law of any such
jurisdictions. The Ordinary Shares have not been and will not be
registered under the US Securities Act nor under the applicable
securities laws of any state or other jurisdiction of the United
States or any province or territory of Canada, Australia, New
Zealand, the Republic of South Africa or Japan. Accordingly, the
Ordinary Shares may not be offered or sold directly or indirectly
in or into the United States, Canada, Australia, New Zealand, the
Republic of South Africa or Japan or to any resident of the United
States, Canada, Australia, New Zealand, the Republic of South
Africa or Japan except pursuant to an exemption to applicable
registration requirements.
The distribution of this announcement and other information in
connection with the Placing and Admission in certain jurisdictions
may be restricted by law and persons into whose possession this
announcement, any document or other information referred to herein
comes should inform themselves about and observe any such
restriction. Any failure to comply with these restrictions may
constitute a violation of the securities laws of any such
jurisdiction. Neither this announcement nor any part of it nor the
fact of its distribution shall form the basis of or be relied on in
connection with or act as an inducement to enter into any contract
or commitment whatsoever.
Liberum Capital Limited, which is authorised and regulated by
the FCA in the United Kingdom, is acting as Nominated Adviser,
Financial Adviser and Joint Bookrunner to the Company. Liberum
Capital Limited, as Nominated Adviser, has not authorised the
contents of, or any part of, this announcement, and no liability
whatsoever is accepted by Liberum Capital Limited for the accuracy
of any information or opinions contained in this announcement or
for the omission of any material information. The responsibilities
of Liberum Capital Limited as the Company's Nominated Adviser under
the AIM Rules for Companies and the AIM Rules for Nominated
Advisers are owed solely to London Stock Exchange plc and are not
owed to the Company or to any director or shareholder of the
Company or any other person, in respect of its decision to acquire
shares in the capital of the Company in reliance on any part of
this announcement, or otherwise. Liberum Capital Limited will not
be responsible to anyone other than the Company for providing the
protections afforded to its clients or for providing advice in
relation to the Placing or any other matters referred to in this
announcement.
Peel Hunt LLP is authorised and regulated by the FCA in the
United Kingdom and is acting as Joint Bookrunner exclusively for
the Company and no one else in connection with the Placing, and
Peel Hunt LLP will not be responsible to anyone other than the
Company for providing the protections afforded to its clients or
for providing advice in relation to the Placing or any other
matters referred to in this announcement.
Redburn (Europe) Limited is authorised and regulated by the FCA
in the United Kingdom and is acting exclusively as Joint Bookrunner
for the Company and no one else in connection with the Placing, and
Redburn (Europe) Limited will not be responsible to anyone other
than the Company for providing the protections afforded to its
clients or for providing advice in relation to the Placing or any
other matters referred to in this announcement.
BNP PARIBAS is authorised and regulated by the FCA in the United
Kingdom and is acting exclusively as Joint Bookrunner for the
Company and no one else in connection with the Placing, and BNP
Paribas will not be responsible to anyone other than the Company
for providing the protections afforded to its clients or for
providing advice in relation to the Placing or any other matters
referred to in this announcement.
Banco Santander S.A. is registered with the Bank of Spain (Banco
de España) under registration number 0049 with CIF A-39000013.
Banco Santander S.A., London Branch is authorised by the Bank of
Spain and subject to limited regulation by the FCA and PRA and is
acting as Joint Bookrunner exclusively for the Company and no one
else in connection with the Placing, and Santander will not be
responsible to anyone other than the Company for providing the
protections afforded to its clients or for providing advice in
relation to the Placing or any other matters referred to in this
announcement.
The person responsible for arranging the release of this
announcement on behalf of the Company is Garth Palmer.
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014, as it
forms part of UK law by virtue of the European Union Withdrawal Act
2018 ("UK MAR"), encompassing information relating to the Proposals
described above, and is disclosed in accordance with the Company's
obligations under Article 17 of UK MAR. In addition, market
soundings (as defined in UK MAR) were taken in respect of the
Placing with the result that certain persons became aware of inside
information (as defined in UK MAR), as permitted by UK MAR. This
inside information is set out in this announcement. Therefore, upon
publication of this announcement, those persons that received such
inside information in a market sounding are no longer in possession
of such inside information relating to the Company and its
securities.
This announcement does not constitute a recommendation
concerning any investor's option with respect to the Placing. Each
investor or prospective investor should conduct his, her or its own
investigation, analysis and evaluation of the business and data
described in this announcement and publicly available information.
The price and value of securities can go down as well as up. Past
performance is not a guide to future performance.
No representation or warranty, express or implied, is or will be
made as to, or in relation to, and no responsibility or liability
is or will be accepted by the Nominated Adviser or Joint
Bookrunners or by any of their respective affiliates or agents as
to, or in relation to, the accuracy or completeness of this
announcement or any other written or oral information made
available to or publicly available to any interested party or its
advisers, and any liability therefor is expressly disclaimed.
This announcement may include statements that are, or may be
deemed to be, "forward-looking statements". These forward-looking
statements can be identified by the use of forward-looking
terminology, including the terms "believes", "estimates", "plans",
"projects", "anticipates", "expects", "intends", "may", "will", or
"should" or, in each case, their negative or other variations or
comparable terminology. These forward-looking statements include
matters that are not historical facts. They appear in a number of
places throughout this announcement and include statements
regarding the directors' current intentions, beliefs or
expectations concerning, among other things, the Company's results
of operations, financial condition, liquidity, prospects, growth,
strategies and the Company's markets. By their nature,
forward-looking statements involve risk and uncertainty because
they relate to future events and circumstances. Actual results and
developments could differ materially from those expressed or
implied by the forward-looking statements. Forward-looking
statements may and often do differ materially from actual results.
Any forward-looking statements in this announcement are based on
certain factors and assumptions, including the directors' current
view with respect to future events and are subject to risks
relating to future events and other risks, uncertainties and
assumptions relating to the Company's operations, results of
operations, growth strategy and liquidity. Whilst the directors
consider these assumptions to be reasonable based upon information
currently available, they may prove to be incorrect. Save as
required by applicable law or regulation, the Company undertakes no
obligation to release publicly the results of any revisions to any
forward-looking statements in this announcement that may occur due
to any change in the directors' expectations or to reflect events
or circumstances after the date of this announcement.
Neither the content of the Company's website nor any website
accessible by hyperlinks on the Company's website is incorporated
in, or forms part of, this announcement.
Information to Distributors
UK Product Governance Requirements
Solely for the purposes of the Product Governance requirements
contained within Chapter 3 of the FCA Handbook Product Intervention
and Product Governance Sourcebook (the "UK Product Governance
Requirements") and disclaiming all and any liability, whether
arising in tort, contract or otherwise, which any "manufacturer"
(for the purposes of the UK Product Governance Requirements) may
otherwise have with respect thereto, the Placing Shares have been
subject to a product approval process, which has determined that
the Placing Shares are: (i) compatible with an end target market of
(a) retail investors, (b) investors who meet the criteria of
professional clients and (c) eligible counterparties, each as
defined in the FCA Handbook Conduct of Business Sourcebook; and
(ii) eligible for distribution through all distribution channels as
are permitted by UK Product Governance Requirements (the "UK Target
Market Assessment"). Notwithstanding the UK Target Market
Assessment, distributors should note that: the price of the Placing
Shares may decline and investors could lose all or part of their
investment; the Placing Shares offer no guaranteed income and no
capital protection; and an investment in the Placing Shares is
compatible only with investors who do not need a guaranteed income
or capital protection, who (either alone or in conjunction with an
appropriate financial or other adviser) are capable of evaluating
the merits and risks of such an investment and who have sufficient
resources to be able to bear any losses that may result
therefrom.
The UK Target Market Assessment is without prejudice to the
requirements of any contractual, legal or regulatory selling
restrictions in relation to the Placing. Furthermore, it is noted
that, notwithstanding the UK Target Market Assessment, the Joint
Bookrunners will only procure investors who meet the criteria of
professional clients and eligible counterparties.
For the avoidance of doubt, the UK Target Market Assessment does
not constitute: (a) an assessment of suitability or appropriateness
for the purposes of Chapters 9A or 10A, respectively, of the FCA
Handbook Conduct of Business Sourcebook; or (b) a recommendation to
any investor or group of investors to invest in, or purchase, or
take any other action whatsoever with respect to, the Placing
Shares.
Each distributor is responsible for undertaking its own target
market assessment in respect of the Placing Shares and determining
appropriate distribution channels.
EU Product Governance Requirements
Solely for the purposes of the product governance requirements
contained within (a) EU Directive 2014/65/EU on markets in
financial instruments, as amended ("MiFID II"), (b) Articles 9 and
10 of Commission Delegated Directive (EU) 2017/593 supplementing
MiFID II and (c) local implementing measures (together the "EU
Product Governance Requirements") and disclaiming all and any
liability, whether arising in tort, contract or otherwise, which
any "manufacturer" (for the purposes of the EU Product Governance
Requirements) may otherwise have with respect thereto, the Placing
Shares have been subject to product approval process, which has
determined that the Placing Shares are: (i) compatible with an end
target market of (a) retail investors, (b) investors who meet the
criteria of professional clients and (c) eligible counterparties,
each as defined in MiFID II; and (ii) eligible for distribution
through all distribution channels as are permitted by EU Product
Governance Requirements (the "EU Target Market Assessment").
Notwithstanding the EU Target Market Assessment, distributors
should note that: the price of the Placing Shares may decline and
investors could lose all or part of their investment; the Placing
Shares offer no guaranteed income and no capital protection; and an
investment in the Placing Shares is compatible only with investors
who do not need a guaranteed income or capital protection, who
(either alone or in conjunction with an appropriate financial or
other adviser) are capable of evaluating the merits and risks of
such an investment and who have sufficient resources to be able to
bear any losses that may result therefrom.
The EU Target Market Assessment is without prejudice to the
requirements of any contractual, legal or regulatory selling
restrictions in relation to the Placing. Furthermore, it is noted
that, notwithstanding the EU Target Market Assessment, the Joint
Bookrunners will only procure investors who meet the criteria of
professional clients and eligible counterparties.
Furthermore, it is noted that, notwithstanding the UK Target
Market Assessment and the EU Target Market Assessment, the Joint
Bookrunners will only procure investors who meet the criteria of
professional clients and eligible counterparties. For the avoidance
of doubt, the EU Target Market Assessment does not constitute: (a)
an assessment of suitability or appropriateness for the purposes of
MiFID II; or (b) a recommendation to any investor or group of
investors to invest in, or purchase, or take any other action
whatsoever with respect to the Placing Shares.
Each distributor is responsible for undertaking its own target
market assessment in respect of the Placing Shares and determining
appropriate distribution channels.
This announcement is not for publication or distribution,
directly or indirectly, in or into the United States. This
announcement is not an offer of securities for sale into the United
States. The securities referred to herein have not been and will
not be registered under the U.S. Securities Act of 1933, as
amended, and may not be offered or sold in the United States,
except pursuant to an applicable exemption from registration. No
public offering of securities is being made in the United
States.
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Publication of this announcement 22 November 2023
Latest time for receipt of proxy forms for 11 a.m. on 7 December
the General Meeting 2023
General Meeting 11 a.m. on 11 December
2023
Completion of the acquisition of the Deal
1 Targets, Admission and dealings commence 8 a.m. on 4 January
in the Enlarged Share Capital on AIM 2024
Issue of Fundraising Shares 8 a.m. on 4 January
2024
CREST accounts credited by 8 a.m. on 4 January
2024
Dispatch of definitive share certificates, Within 10 business days
where applicable of Admission
In respect of the Call Option Targets
Carve Out(1) of UK Target expected by 28 March 2024
Carve Out(1) of Polish Target expected by 30 June 2024
Expected timing for UK Target Completion by(2) 28 March 2024
Expected timing for Polish Target Completion 30 September 2024
by(3)
1 The Carve Outs of the UK Target and the Polish Target are
required because the assets and businesses which will come to form
the UK Target and Polish Target are not at present standalone
entities and will need to be carved-out of existing CRH businesses
such that they are standalone entities, which can be acquired.
2 Subject to the Company electing to exercise (in its sole
discretion) the UK Call Option.
3 Subject to receipt of the Polish Competition Office Clearance
and the Polish Purchaser electing to exercise (in its sole
discretion) the Polish Call Option.
Notes:
Each of these times and dates is subject to change, particularly
depending on the timing of the Polish Competition Office Clearance
and the Carve Outs. Any changes to timing are at the absolute
discretion of the Company, the Nominated Adviser and the Joint
Bookrunners. Any changes to the expected timetable will be notified
by the Company through an RIS. References to times are to London,
UK times.
FURTHER INFORMATION
BACKGROUND TO, AND REASONS FOR, THE PROPOSALS
At its inception in 2016, the Company set out its buy and build
strategy in the construction materials sector, seeking to build a
diversified stream of income, sourcing stability and growth from
niche markets and sectors, presenting what the Board believed was
the opportunity to build a significant Northern Europe-focused
construction materials business. To date, the Company has delivered
on this buy and build strategy by making 21 acquisitions over the
last 7 years, applying a decentralised operating model and
generating an income stream diversified across end markets. This
model allows for local autonomy and decision making while capturing
the benefits of the Existing Group's European network. The
Company's acquisition strategy is focused on driving scale,
synergies and margins, as operations are integrated, invested in
and de-risked. The proposed Acquisitions represent a significant
opportunity to create one of the leading lime producers in Northern
Europe, combining complementary footprints.
Since admission to AIM in early 2017, the Company has delivered
growth by identifying and executing suitable acquisitions at
attractive valuations, generating further value through
improvements in operational efficiency, synergies and
cross-selling. Over the last five years the Existing Group has
delivered an increase in earnings per share of over 300 per cent.
whilst ensuring the gearing level was maintained at reasonable
levels.
In July 2021, the Company acquired the Nordkalk Group which the
Directors believe represented a continuation of this model and a
transformational step change for SigmaRoc, adding new platforms to
become a sizeable limestone and lime operator. The acquisition of
the Nordkalk Group created a market leading Northern European
quarried materials group, providing a major entry point to
attractive new end-user markets, with high value add
characteristics, supplying the construction, environmental,
agricultural, metals, PPB, chemical and food industries. The
acquisition of Nordkalk was significantly earnings enhancing in its
first full year of ownership by SigmaRoc and the Directors believe
that there is continued potential to further drive earnings
growth.
In continuation of this strategy, the Company has now entered
into the Master Purchase Agreement pursuant to which it (and with
respect to the German Target, the German Purchaser) has
conditionally agreed to acquire the Deal 1 Targets, being:
(i) the entire issued share capital of the German Target, being
Fels Holding GmbH (including its fully owned (direct or indirect)
subsidiaries Fels-Werke GmbH, Fels Netz GmbH and Fels Vertriebs und
Service GmbH & Co. KG);
(ii) 75 per cent. of the issued share capital of the Czech
Target, being Vápenka Vito š ov s.r.o.; and
(iii) the entire issued share capital of the Irish Target, being Clogrennane Lime Limited.
The acquisition of the Deal 1 Targets represents a Reverse
Takeover for the purposes of Rule 14 of the AIM Rules for
Companies. As such, it is conditional, inter alia, upon Shareholder
approval.
The Company has also entered into the UK Call Option and the
Polish Call Option. Following the incorporation of the Polish SPV,
which shall occur shortly after the date of this announcement, the
Polish SPV shall accede to the Polish Call Option and shall have
the right to exercise such option. Subject to certain conditions
(including the Carve Outs being effected), the Call Options provide
the right (but not the obligation) to acquire, separately, the UK
Target and the Polish Target (as relevant), being:
(i) the entire issued share capital of the UK Target, being
Tarmac Shelfco Limited (including the business comprising CRH's
lime production and associated distribution network and assets
located in the United Kingdom which will be transferred to the UK
Target prior to completion) subject to and conditional upon the
Company exercising its right under the UK Call Option; and
(ii) the entire issued share capital of the Polish Target, being
Ovetill Investments Sp. z o.o. (including the business comprising
CRH's lime and limestone flour production and associated
distribution network and assets located in Poland which will be
transferred to the Polish Target prior to completion) subject to
and conditional upon the Polish Purchaser exercising its right
under the Polish Call Option.
The acquisition of the Deal 1 Targets is expected to complete on
4 January 2024. The acquisition of the UK Target and the Polish
Target will only complete if the Company and/or the Polish
Purchaser (as applicable) elects to exercise its right pursuant to
the relevant Call Option and the relevant conditions therein (being
the Conditions to the UK Call Option and the Conditions to the
Polish Call Option) being satisfied.
The Carve Outs of the UK Target and the Polish Target are
required because the assets and businesses which will come to form
the UK Target and Polish Target are not at present standalone
entities and will need to be carved-out of existing CRH businesses
such that they are standalone entities, which can be acquired.
Summary details of the UK Carve Out and the Polish Carve Out are
summarised in paragraph 15 of this Part I of the document. The UK
Call Option must be exercised and the completion of the acquisition
of the UK Target must occur by 28 March 2024. The Company currently
expects the Polish Carve Out to have completed and the Polish
Competition Clearance to have been received by no later than Q3
2024, however both events are largely outside the Company's
control.
The operations of the Targets (being both the Deal 1 Targets and
the Call Option Targets) include extracting limestone from quarries
as well further processing the limestone to, for example, produce
limestone flour or burn the limestone to produce lime.
The Directors believe that the acquisitions of the Deal 1
Targets and, if the relevant Call Option are exercised, the Polish
Target and the UK Target, have compelling strategic rationale and
will create significant and sustainable value, allowing the Company
to:
-- create a sector leading industrial minerals business in lime
and limestone across Northern Europe: expanding into complementary
geographic footprints with leading market positions;
-- serve diversified end-markets with lime which is essential to
a number of key industrial processes including in construction,
steel manufacturing, chemicals production and agriculture each with
positive growth outlooks;
-- become a strategic partner to OEMs to help deliver future
CCUS infrastructure that will bring multi-jurisdiction OEMs and
lime producers together; and
-- deliver at least EUR30 million of EBITDA synergies through
network optimisation, economies of scale in procurement, and
operational improvements by 31 December 2027.
Further details of the Deal 1 Targets and the Call Option
Targets are set out below.
Summary financials of the Deal 1 Targets
CAGR
EUR'000 FY20 FY21 FY22 H1 2022 H1 2023 (FY20-FY22)
Revenue 273,263 308,131 380,220 177,807 208,159 18.0%
EBITDA 59,759 66,744 88,312 38,056 46,636 21.6%
Operating Profit 34,314 42,993 62,880 25,439 34,935 35.4%
Net assets 378,783 419,270 417,976 414,988 436,451 5.0%
Source: HFI and Interims
Summary financials of the
Call Option Targets
The UK Target
CAGR
EUR'000 FY20 FY21 FY22 (FY20-FY22)
Revenue 51,129 70,472 105,352 43.5%
Operating Profit 4,557 7,502 19,550 107.1%
The Polish Target CAGR
EUR'000 FY20 FY21 FY22 (FY20-FY22)
Revenue 61,642 69,039 94,138 23.6%
Operating Profit 16,495 18,266 20,041 10.2%
Source: unaudited management information
In total, the Targets (being both the Deal 1 Targets and the
Call Option Targets) operate 11 quarries and 14 production sites
with kilns. The German Target is the most significant operation,
comprising 52 per cent. of FY22 revenue, this increases to 62 per
cent. when the Czech Target (which it oversees) is also included.
Note these figures are based on the Deal 1 Targets and Call Option
Targets combined. Lime is the main product of the Targets,
representing c. 77 per cent. of revenue (FY22 basis) and lime and
limestone combined is 84 per cent. in FY22. Lime is priced
significantly higher compared to other products.
The revenue of the Enlarged Group together with the Call Option
Targets on a pro forma basis would have exceeded GBP1 billion in
FY22, whilst operating profit would have generated c. GBP154
million. Minerals by volume combined for the Enlarged Group and the
Call Option Targets are c. 2.7 billion tonnes (as at 30 June
2023).
The Directors believe that the lime and limestone markets are
highly attractive and have significant positive long-term
opportunities. Lime is a critical material for numerous industrial
processes across many sectors in the economy and limestone is a
versatile construction and industrial mineral with high barriers to
entry. Construction demand for lime and limestone is expected to
increase as a result of infrastructure investment, particularly in
central Europe, and demand for low CO2 alternatives including the
replacement of cement with carbonate product in concrete is also
expected to increase. Together, lime and limestone offer solutions
to several emission and environmental challenges which is expected
to fuel growth across a number of other end markets.
The Acquisitions will enhance the Existing Group's position,
scale and expertise in the limestone and lime markets with the
Enlarged Group expected to realise end market diversification
benefits from the expanded platform. This strategy is intended to
see the Company grow a diversified stream of cash flows from local
markets across Europe and is consistent with the Company's 'Invest,
Improve, Integrate, Innovate' strategy.
INFORMATION ON TARGETS
The Targets (being both the Deal 1 Targets and the Call Option
Targets) are part of the CRH group, a leading provider of building
material solutions with c. 75,800 employees based in 29
countries.
The Targets operate through local entities in Germany, Czech
Republic and Ireland (the Deal 1 Targets) and the UK and Poland
(the Call Option Targets). These businesses are largely stand-alone
except for the UK Target and Polish Target, which require carving
out of existing CRH businesses in order to be acquired.
The Targets are, when taken together, one of the leading lime
producers in Europe by market position, behind Lhoist. The top five
customers of the Targets averaged c. 50 per cent. of revenue from
FY19 to FY22. Relationships tend to be stable (lime is generally an
important but a relatively low value part of an end production
value chain). Each Target has a well invested footprint close to
its customer base and a strong track record of resilient growth,
profitability, and successful pass through of cost increases to
customers.
The Targets' operations include extracting limestone from
quarries as well as further processing the limestone, creating for
example, limestone flour or burning the limestone to produce lime.
In total, the Targets operate 11 quarries and 14 production sites
with kilns. Contracts with customers have formal price adjustment
clauses ("PACs"), automatically passing through cost inflation. In
addition, the Targets have long lifetime reserves from
(predominantly) quarry ownership but also long-term supply deals.
The Targets' plants in Germany, Czech Republic and Poland are rail
connected and offer transport flexibility.
The Targets' products include: limestone which is crushed;
limestone and limestone chippings of different grain sizes;
limestone flour which is essentially washed, dried and ground
limestone chippings (flours of <0.1mm); and lime encompassing
lump/ground lime (burned (calcined), crushed, washed, and sized
limestone can also be ground) and hydrated lime (washed, dried and
ground limestone chippings (flours of <0.1 mm)).
Summary financial information on the Deal 1 Targets (the German
Target, Czech Target and Irish Target) and the Call Option Targets
(being the UK Target and the Polish Target) for the year ended 31
December 2022 is set out below:
Deal 1 Targets Call Option Targets*
German Target Czech Irish Polish Target UK Target
Target Target
-------------- ------------ ------------ -------------- --------------
Revenue (EUR'm) 303.0 (52.3%) 54.7 (9.4%) 22.5 (3.9%) 94.1 (16.2%) 105.4 (18.2%)
(% of total)
-------------- ------------ ------------ -------------- --------------
Source: unaudited management information
* Each of the UK Target and the Polish Target may be acquired by
SigmaRoc subject to and conditional upon the exercise by the
Company (in its sole discretion) of the relevant Call Option.
Percentage references are of Deal1 and Call Option Targets
combined.
Volumes and ASP have historically been stable (limited
disruption from COVID-19) and are supported by a lack of ready
substitutes for lime product as an input, limited alternate
suppliers within an economic distance to offset transport costs and
due to lime as an input cost tending to be a low value relative to
a customer's end product.
Limestone is c. 8 per cent. of the Targets' combined revenue
(but c. 44 per cent. by volume) and the product is mainly crushed
limestone and limestone chippings of different grain sizes. Other
product offerings include mortar (in Germany and Czech Republic),
as well as fertilizer and flours (Poland). All of the Targets'
products are used across a range of industry segments, mainly as
intermediary inputs as part of wider production processes.
Industrial applications is the largest segment; this includes the
steel industry (the largest end market across operating companies).
This spread of applications and the (relative) low value has tended
to limit any material fluctuations in demand, for instance during
COVID-19.
History of the Targets
The Deal 1 Targets
The German Target operates predominantly as a holding company
for Fels-Werke GmbH, which was founded in the late 1930s, and Fels
Netz GmbH and Fels Vertriebs- und Service GmbH & Co. KG.
Fels-Werke GmbH has been the official trading of the main operating
company name since 1971. In 1991 it acquired Harz-Kalk GmbH, which
included the Kaltes Tal, Rubeland, Hornberg, Schraplau and Oberrohn
plants. A 1999 takeover of the Rudersdorf (near Berlin) and Saal
plants made it the #2 lime producer in Germany. Eight production
plants (and 39 kilns), comprising six lime plants, one dedicated
dolomitic plant and one mortar plant. It is geographically well
positioned to serve almost the entire country and it has #1 market
position in the North and East regions.
The Czech Target has operated in the local lime market since
1872 and was acquired as part of Fels in August 2017. There is a
legacy 25 per cent. minority interest (which are mainly private
investors). The Czech Target shares a leading local market position
with Lhoist. Its operations are run from a single production plant
(3 kilns), based at Hrabova. Management of the Czech Target is also
overseen by the German Target, an arrangement which pre-dates the
CRH acquisition of Fels.
The Irish Target is the only lime producer in the Republic of
Ireland and trades as a standalone entity which dates back to 1816
and operates from two sites, being Carlow and Toonagh.
Call Option Targets
The Polish Target was founded in 1910 and has two lime
production plants (total of 11 kilns), in Kujway and Sitkowka. Both
were acquired by CRH in 2003 (as part of two separate
transactions). The Sitkowka plant is located on a quarry site, with
the country head office also on site. Kujawy is the only lime plant
in Northern Poland. It is production only (no quarry). It holds a
market-leading position in what is a consolidated lime market in
Poland.
The business which will be acquired as part of the UK Target was
founded in 1891. It is the leading producer of lime products in the
UK. The business was acquired by CRH in 2015 as part of the
Lafarge/Tarmac business. Its operations comprise two sites, one in
Tunstead and one in Hindlow (with a total of 5 permitted kilns). It
is a leading player in soil revitalisation (which is important for
the civil engineering sector). Hindlow and Tunstead quarries will
be retained by CRH with material being sold to the Enlarged Group
under long term supply agreements.
Structure of the Targets
The Targets operate through 5 separate business units:
Deal 1 Targets Call Option Targets*
German Target Czech Irish Target Polish UK Target
Target Target
---------------- ---------------- -------------- ------------------ --------------
Founded 1930s 1872 1816 1910 1891
---------------- ---------------- -------------- ------------------ --------------
Lime v limestone Both Both Both Lime only Lime only
---------------- ---------------- -------------- ------------------ --------------
Plants /
kilns 8 / 39 1 / 3 2 / 2 2 / 11 2 / 5
---------------- ---------------- -------------- ------------------ --------------
Locations Lower Saxony, Moravia/Olomouc HQ in Carlow, Two locations HQ in Buxton,
in country Saxony Anhalt, Region, also a plant located plants in
Brandenburg, Vito š in Ennis in the Northwest Tunstead
Bavaria ov and Southeast and Hindlow
of the country
---------------- ---------------- -------------- ------------------ --------------
* Each of the UK Target and the Polish Target may be acquired by
SigmaRoc subject to and conditional upon the exercise by the
Company (in its sole discretion) of the relevant Call Option.
Reserves and Resources of the Targets
The Deal 1 Targets
Total Reserves Total Resources Total Reserves
and Resources
(Mt) (Mt) (Mt)
Combined - Germany 274 749 1023
Vito š ov - Czech Republic 21 21 42
Clogrennane - Ireland 4 0 4
Total 299 770 1069
The Deal 1 Targets have long lifetime reserves from (mainly)
quarry ownership and long-term supply deals. Kilns and key plant
are subject to scheduled maintenance cycles, with no material
disruption to production noted in the three years to 31 December
2022. There are 6 active lime production plants in Germany which
are supported by quarries.
Reserves can sustain over the long-term with average life
reaching up to 100+ years in certain locations (e.g. Germany). The
Targets are a leading supplier in key markets with a high-quality
limestone reserve base.
The Call Option Targets
Neither the UK Target nor the Polish Target own any quarry sites
and therefore do not have any reserves or resources attributed to
them. The Call Option Targets currently purchase limestone inputs
through either an inter-company basis from CRH or from third
parties. In the event that the UK Call Option is exercised by the
Company (and upon completion of the UK SPA), the UK Target will put
in place a long-term supply agreement with the UK Seller for
limestone supply to each of the Tunstead and Hindlow sites. The
terms of such agreements have been agreed between the Company and
the UK Seller. In connection with the Polish Call Option, the
Polish Target will put in place a long-term limestone supply
agreement with the CRH group on the terms that have been agreed
between the Company and the Polish Seller.
SUMMARY FINANCIAL INFORMATION AND CURRENT TRADING OF THE
TARGETS
Summary financials of the Deal 1 Targets
CAGR
EUR'000 FY20 FY21 FY22 H1 2022 H1 2023 (FY20-FY22)
Revenue 273,263 308,131 380,220 177,807 208,159 18.0%
EBITDA 59,759 66,744 88,312 38,056 46,636 21.6%
Operating
Profit 34,314 42,993 62,880 25,439 34,935 35.4%
Net assets 378,783 419,270 417,976 414,988 436,451 5.0%
Source: HFI and Interims
Summary financials of the Call
Option Targets
The UK Target
CAGR
EUR'000 FY20 FY21 FY22 (FY20-FY22)
Revenue 51,129 70,472 105,352 43.5%
Operating Profit 4,557 7,502 19,550 107.1%
The Polish Target CAGR
EUR'000 FY20 FY21 FY22 (FY20-FY22)
Revenue 61,642 69,039 94,138 23.6%
Operating Profit 16,495 18,266 20,041 10.2%
Source: unaudited management information
SYNERGIES BETWEEN THE EXISTING GROUP AND THE TARGETS
The Directors believe there are clear synergy upsides through
combining the Existing Group with the Targets and the following are
expected to deliver EBITDA of at least EUR30m per annum by 31
December 2027 with potential for further significant upside:
-- synergy potential driven by identical business models of both
entities which makes focused synergies identification possible;
-- initial outside in synergies estimation focused on pricing,
procurement, standalone plant optimisation, selling, general and
administrative cost savings, and plant network optimisation;
-- both entities are also expected to benefit from standalone
optimisation since individual countries are not fully
integrated;
-- there are no dyssynergies expected due to no direct overlap
in respective end markets/and geographies; and
-- selling, general and administrative cost upsides are expected
to be more limit
The Directors believe improved EBITDA will be generated through
operational improvement, material utilisation, commercial strategy,
procurement synergies, restructuring and strategic capital
investment.
PRINCIPAL TERMS AND CONDITIONS OF THE ACQUISITION
Deal 1 Targets
The Company has conditionally agreed to acquire the Deal 1
Targets pursuant to the Master Purchase Agreement. Details of the
Deal 1 Targets are set out below:
Target Name Seller Percentage of
share capital
being acquired
Fels Holding GmbH, including its fully owned
(direct or indirect) subsidiaries:
* Fels-Werke GmbH,
* Fels Netz GmbH
CRH Zehnte
Vermögensverwaltungs
German Target * Fels Vertriebs und Service GmbH & Co KG GmbH 100%
---------------------------------------------------- --------------------------- ------------------
CRH Europe Investments
Czech Target Vápenka Vito š ov s.r.o. B.V. 75%
---------------------------------------------------- --------------------------- ------------------
Irish Target Clogrennane Lime Limited Irish Cement Limited 100%
---------------------------------------------------- --------------------------- ------------------
The total consideration payable by the Company and the German
Purchaser to the Deal 1 Sellers for the Deal 1 Targets is EUR745
million (approximately GBP645 million) subject to customary
adjustments in respect of the target entities net debt and working
capital position on 4 January 2024. This will be satisfied by a
combination of proceeds of the Placing, the New Facilities and plus
use of certain cash resources.
Due to its size, the acquisition of the Deal 1 Targets comprises
a reverse takeover of the Company pursuant to Rule 14 of the AIM
Rules for Companies and completion of the Deal 1 Acquisition is
therefore conditional on , inter alia, the approval of Shareholders
at the General Meeting.
Deal 1 Completion is also conditional upon, inter alia: (i) the
passing of the Resolutions numbered 1 and 2; (ii) Admission; (iii)
all conditions to SigmaRoc's equity and debt financing becoming
unconditional or waived (with the exception of conditions relating
to Admission occurring or the completion of the Master Purchase
Agreement).
In the event that the Master Purchase Agreement is terminated
by: (i) the Deal 1 Sellers or the Company because a final and
non-appealable decision of a governmental authority or court
prohibits the Deal 1 Completion; (ii) the Deal 1 Sellers or the
Company because the closing conditions have not been fulfilled
within four months after the date of the Master Purchase Agreement;
or (iii) the Deal 1 Sellers because the Company has failed to take
any action required to be taken by it to fulfill the closing
conditions and closing actions, the Company shall pay a break fee
in the amount of EUR12,500,000 to CRH Finance DAC.
In the event that the Master Purchase Agreement is terminated by
the Company because: the Deal 1 Sellers have failed to take any
action required to be taken by it to fulfill the closing actions
fail (and such failure is not remedied within five business days),
the Deal 1 Sellers' representative shall pay a break fee in the
amount of EUR12,500,000 to the Company.
Call Option Targets (Deal 2 Target and Deal 3 Target)
The Company and the Polish Purchaser have respectively also
entered into the UK Call Option and the Polish Call Option pursuant
to which they have been granted the right (but not the obligation)
to separately acquire the UK Target and the Polish Target
respectively. Details of the Call Option Targets are set out
below:
Target Name Seller Percentage
of share capital
being acquired
Tarmac Cement
UK Target Tarmac Shelfco Limited and Lime Limited 100%
------------------------ ------------------- ------------------
Ovetill Investments
Polish Target Sp. Z o.o. Trzuskawica S.A. 100%
------------------------ ------------------- ------------------
The exercise of the UK Call Option is entirely at the Company's
discretion and the exercise of the Polish Call Option is entirely
at the Polish Purchaser's discretion.
The exercise of the UK Call Option is conditional upon (i) Deal
1 Completion having occurred; and (ii) the Company having received
notice from the UK Seller that the UK Carve Out has completed. Once
exercised, the Company will enter into the UK SPA (an agreed form
of which is attached to the UK Call Option, subject to certain
schedules being updated between the date of the UK Call Option and
the date of the completion of the UK Call Option). The last day for
the exercise of the UK Call Option is 23 March 2024 (unless
extended by the UK Seller by notification to the Company no later
than 20 March 2024) and the last day for the completion of the UK
SPA is 28 March 2024 (unless extended by the UK Seller by
notification to the Company no later than 25 March 2024).
In the event that the Company exercises its option to enter into
the UK SPA and thereby to acquire the UK Target pursuant to the UK
SPA, the total consideration payable by the Company to the UK
Seller for the UK Target is EUR155 million (approximately GBP135
million) (subject to customary adjustment in respect of the UK
Target's net debt and working capital position following completion
of the UK SPA).
If the UK Call Option is terminated the Company shall pay a
compensation fee in the amount of EUR25,000,000 to CRH Finance
DAC.
The exercise of the Polish Call Option is conditional upon (i)
the Polish Purchaser having received notice from the Polish Seller
that the Polish Carve Out has completed; and (ii) the Target
operating the only burnt lime business of the Polish Seller and its
Affiliates which is located in Europe. (Once exercised, the Company
will enter into the Polish SPA (an agreed form of which is attached
to the Polish Call Option, subject to certain schedules being
updated between the date of the Polish Call Option and the date of
the completion of the Polish Call Option). Completion of the Polish
SPA (if the Polish Call Option is exercised) is conditional upon
the Polish Purchaser having received Polish Competition Office
Clearance.
In the event that the Company exercises its option to enter into
the Polish SPA and thereby to acquire the Polish Target pursuant to
the Polish SPA, the total consideration payable by the Company to
the Polish Seller for the Polish Target is EUR100 million
(approximately GBP87 million) (subject to customary adjustment in
respect of the Polish Target's net debt and working capital
position at the time following completion of the Polish SPA).
If the Polish Call Option is terminated the Company shall pay a
compensation fee in the amount of EUR25,000,000 to CRH Finance
DAC.
The exercise of the UK Call Option is entirely at the Company's
discretion and the exercise of the Polish Call Option is entirely
at the Polish Purchaser's discretion. The Call Options will, once
exercised, require the Company and/or Polish Purchaser (as
applicable) to acquire the UK Target and the Polish Target on the
terms of the substantially agreed form SPAs to be attached to the
relevant Call Option (subject to any changes to that agreed form as
may be required to reflect the final terms of the Carve Outs). The
Company and the Polish Purchaser (as applicable) shall have no
control over either the Polish Target or the UK Targets nor their
assets or businesses until the Call Options have been exercised and
the sale and purchase under the associated SPA completed.
THE POLISH CALL OPTION - POLISH COMPETITION OFFICE CLEARANCE
The exercise by the Polish Purchaser of its option to enter into
the Polish SPA (subject to and conditional upon, among other
things, the Polish Carve Out being effected and the Polish
Purchaser exercising the Polish Call Option) and thereby to acquire
the Polish Target pursuant to the Polish SPA is conditional, inter
alia, on the Polish Purchaser receiving Polish Competition Office
Clearance, for which the Polish Purchaser will make the necessary
filings with the Polish Competition Office once the Polish SPA is
executed.
The exercise by the Company of its right to acquire the UK
Target pursuant to the UK Call Option is not conditional upon the
Company receiving Polish Competition Office Clearance.
CARVE OUT OF THE CALL OPTION TARGETS
The Carve Out of the UK Target is required because the assets
and businesses which will come to form the UK Target are not at
present standalone entities and will need to be carved-out of
existing CRH businesses such that they can be acquired pursuant to
the UK SPA. The UK Carve-Out will include the transfer of
contracts, information, employees, plant and equipment and other
assets relating to the UK lime business of the UK Seller.
The Carve Out of the Polish Target is required because the
assets and businesses which will come to form the Polish Target are
not at present standalone entities and will need to be carved-out
of existing CRH businesses, which can be acquired pursuant to the
Polish SPA. The Polish Carve-Out shall be effected by way of a
capital contribution, and shall involve the transfer of the assets
and liabilities of the Polish Seller's burnt lime and lime powder
business to the Polish Target.
FINANCIAL EFFECTS OF THE ACQUISITION
The share capital of the Company is admitted to trading on AIM.
For the financial year ending 31 December 2022, the Company had
revenues of GBP538 million, underlying EBITDA of GBP102 million,
underlying profit after tax at GBP54 million, underlying earnings
per share of 8.03 pence and an adjusted leverage ratio of 1.93
times. As at 31 December 2022, the Company had total assets of
GBP966.9 million, including tangible assets of GBP523.3 million,
and net assets of GBP469 million.
Enlarged Group underlying pro-forma income statement:
Underlying GBP
millions 31 December 2022 6 Months To 30 June 2023
---------------- --------------------------------- ---------------------------------
Deal Enlarged Deal Enlarged
SigmaRoc 1 Targets Group SigmaRoc 1 Targets Group
Revenue 538 324 862 290 182 472
Cost of sales (392) (238) (631) (208) (131) (339)
Gross profit 146 86 232 82 51 133
Gross margin 27% 27% 27% 28% 28% 28%
EBITDA 102 74 175 55 41 95
EBITDA margin 19% 23% 20% 19% 22% 20%
Profit after
interest and
tax 54 36 75 28 18 41
---------------- --------- ----------- --------- --------- ----------- ---------
CURRENT TRADING AND FUTURE PROSPECTS
The Existing Group
In the 9 months to 30 September 2023 SigmaRoc delivered LFL
revenue growth of 7 per cent. in Q3 2023 to GBP435.9 million,
reflecting the benefits of diversified market exposure together
with effective pricing actions. LFL Group volumes declined by 4 per
cent., reflecting softer demand in the residential construction
sector which was largely offset by resilient conditions in
infrastructure and industrial mineral markets. Underlying EBITDA
was GBP87.1 million and underlying margin was 20 per cent.
Operations and trading
Q3 2023 saw continued robust trading in most markets, offsetting
weakness in new build construction, some agricultural products, and
the earlier weakness in paper. Overall pricing evolved favourably,
while some of the higher pass-through costs abated, along with
further operational improvements, translating into improved
margins.
The Deal 1 Targets
For the six months ended 30 June 2023, the Deal 1 Targets
generated revenues of EUR208.2 million and operating profit of
EUR34.9 million, representing an increase of 17.1 per cent. and
37.3 per cent. respectively over the same first half period in the
prior year.
The Directors are confident in the current business activities
and future prospects of the Enlarged Group and believe that,
following the Acquisitions, with the assistance of SigmaRoc, the
existing management of the Targets will be able to continue their
focus on maximising profitability through sales growth into higher
margin value added products, production efficiencies and cost
savings.
In summary the Directors believe that strong cash generation and
disciplined capital allocation will be the key drivers for
increasing shareholder returns.
FINANCING OF THE ACQUISITION
Deal 1 Targets
The total consideration payable to the Deal 1 Sellers under the
Master Purchase Agreement for the Deal 1 Targets is EUR745 million
(approximately GBP645 million) (including c.EUR211.5 million in
connection with the assignment of the German Intercompany Loan
Receivables) (subject to customary adjustments in respect of the
target entities' net debt and working capital position at 1 January
2024).
The consideration for the Deal 1 Targets will be financed by the
Company as follows:
-- EUR230 million (approximately GBP200 million) from the Fundraising;
-- EUR350 million (approximately GBP300 million) pursuant to the
drawdown of the New Facilities; and
-- deferred consideration of EUR75 million (approximately GBP65 million).
Deal 2 Target
In the event that the Company exercises its right under the UK
Call Option and enters into the UK SPA, it will acquire the UK
Target. The total consideration payable by the Company to the UK
Seller for the UK Target is EUR155 million (subject to customary
adjustment in respect of the UK Target's net debt and working
capital position following completion of the UK SPA). This will be
satisfied by the drawdown of EUR155 million (approximately GBP135
million) under the New Facilities.
Deal 3 Target
In the event that the Company exercises its right under the
Polish Call Option (and if Polish Competition Clearance is
obtained) and the Polish Purchaser enters into the Polish SPA, it
will acquire the Polish Target. The total consideration payable by
the Company to the Polish Seller for the Polish Target is EUR100
million (approximately GBP87 million) (subject to customary
adjustment in respect of the Polish Target's net debt and working
capital position following completion of the Polish SPA).
THE NEW FACILITIES
The New Facilities are being provided to the Company by Banco
Santander S.A. London Branch and BNP Paribas (as mandated lead
arrangers, underwriters and bookrunners), and comprises: (i) the
Term Loan, which is a five year term loan of EUR600 million to part
finance the Acquisitions, refinance the Existing Facility and to
pay the financing costs; (ii) the Bridge Loan, which is a one year
term loan of EUR125 million to part finance the Acquisitions; and
(iii) the RCF, which is a revolving credit facility of EUR150
million to part finance the Acquisitions and for general corporate
purposes. A EUR100 million uncommitted accordion can be exercised
under the RCF.
The Term Loan has a 12 month capital repayment holiday and then
EUR15 million is repayable by the Company on the date falling one
year after the draw down of the Term Loan and each quarter
following the first repayment date and on the final termination
date on at which all other amounts outstanding (if any) under the
Term Loan will be repaid.
Interest will be applied on amounts drawn down under the Term
Loan and RCF at a rate of 2.75 per cent. plus EURIBOR (or, in the
case of drawings in sterling, compounded SONIA and a credit
adjustment spread) subject to the below margin grid:
Term Loan and RCF
Adjusted Leverage Margin
% per annum
Greater than or equal to 3.25:1 3.50
Less than 3.25:1 but greater than or
equal to 3.00:1 3.25
Less than 3.00:1 but greater than or
equal to 2.50:1 3.00
Less than 2.50:1 but greater than or
equal to 2.00:1 2.75
Less than 2.00:1 but greater than or
equal to 1.50:1 2.50
Less than 1.50:1 but greater than or
equal to 1.00:1 2.25
Less than 1.00:1 2.00
The Bridge Loan is repayable after 12 months and includes two 6
month extension options.
Interest will be applied on amounts drawn under the Bridge Loan
based on the below margin grid, plus EURIBOR:
Months Bridge Loan Margin
% per annum
0-6 2.00
7-12 3.00
13-18 4.00
19-24 5.00
In consideration for the New Facilities, the Company and its
material trading entities incorporated in England and Wales,
Belgium, Finland, Sweden, Germany, Poland, Jersey and Guernsey will
grant security, including, inter alia, share security and security
over key assets in favor of Wilmington Trust, London Branch (as
Security Trustee for the secured parties under the New Facilities).
Following Deal 1 Completion, security shall also be taken from the
Targets over:
-- the entire issued share capital of the German Target; and
-- the entire issued share capital of the Irish Target, being Clogrennane Lime Limited.
Pursuant to the New Facilities, the Company has also given
certain financial covenants to the Lenders that its maximum
Adjusted Leverage Ratio shall not exceed 3.95x, reducing to 3.75x
for each relevant period expiring after 31 December 2024, 3.50x for
each relevant period expiring after 31 December 2025 and 3.00x for
each relevant period expiring after 31 December 2026 and minimum
interest cover ratio of 3.50x while the Bridge Loan remains
outstanding, increasing to 4.00x thereafter for the remaining
period. It also includes a customary suite of corporate activities
which would require the Lenders' consent.
DETAILS OF THE PLACING AND THE REX INTERMEDIARIES OFFER
The Placing is being conducted through an accelerated bookbuild
process which will be launched immediately following this
announcement in accordance with the terms of conditions set out in
Appendix III to this announcement. The Placing will raise up to
GBP200 million (before expenses) for the Company, through the
Placing of up to 421,052,631 Placing Shares with investors at the
Issue Price conditional, inter alia, upon the passing of
Resolutions numbered 1 and 2, Deal 1 Completion and Admission.
The Company values its retail investor base and will therefore
be providing private and other Shareholders the opportunity to
participate on the same terms as other subscribers in the Placing,
via the REX Intermediaries Offer. The REX Intermediaries Offer is a
separate offer and will launch shortly hereafter, pursuant to a
separate announcement.
The Placing and the REX Intermediaries Offer are conditional
upon, inter alia, Shareholders passing Resolutions numbered 1 and 2
at the General Meeting, Deal 1 Completion and Admission becoming
effective by not later than 8 a.m. on 4 January 2024 (or such later
date as the Company, the Nominated Adviser and the Joint
Bookrunners may agree being not later than 8.30 a.m. on 18 January
2024). The Fundraising Shares will be issued as fully paid and
will, upon issue, rank pari passu with the Ordinary Shares
including the right to receive all dividends and other
distributions declared, made or paid on or in respect of such
shares after their date of issue, being the date of Admission.
Following Admission, the Fundraising Shares are expected to
collectively represent approximately 37.8 per cent. of the Enlarged
Share Capital.
THE NEW OPTION PLAN
In connection with the Proposals, the Company is intending to
adopt the New Option Plan (to be known as the "Sigmaroc plc Share
Option Plan 2023") in order to incentivise the executives and
senior management and align their interests with those of the
Shareholders. Summary terms of the New Option Plan are set out
below.
Administration and eligibility
The Remuneration Committee will administer the operation of the
New Option Plan. Under the New Option Plan rules, any employee
(including an Executive Director) of the Company and its
subsidiaries will be eligible to participate in the New Option Plan
at the discretion of the Remuneration Committee. Additional
eligibility requirements apply in respect of tax-qualified
options.
Operation of the New Option Plan and terms of New Options
It is proposed that the New Option Plan will only be operated
once and that the New Options will be granted conditional on
Admission. The New Options granted will comprise a one-off grant in
connection with the Proposals and it is not expected that
participants in the New Option Plan will be considered for further
grants of options under the New Option Plan in the future, unless
the Remuneration Committee determines otherwise in exceptional
circumstances.
No payment is required for the grant of the New Options. The New
Options are not transferable, except on death or with the prior
consent of the Remuneration Committee (subject to any terms the
Remuneration Committee imposes).
It is proposed that New Options will be granted in respect of a
total of 51,630,253 Ordinary Shares representing 4.6 per cent. of
the Company's issued share capital on Admission.
The exercise price per New Option will be set at 60 pence. The
New Options will vest and become exercisable on the third
anniversary of grant and remain exercisable until the tenth
anniversary subject to the terms of the New Option Plan.
A New Option will include a right for a participant to receive
dividend equivalents, i.e. additional cash or Ordinary Shares on
exercise of an amount equal to the dividends that would have been
paid on the Ordinary Shares subject to the New Option between the
date of grant and the time the New Options become exercisable. Due
to statutory restrictions, dividend equivalents will not be paid in
respect of an New Options that are tax-qualified.
Plan limit
The New Option Plan may operate over new issue Ordinary Shares,
treasury Ordinary Shares or Ordinary Shares purchased in the market
(not being treasury Ordinary Shares).
The New Option Plan will operate within the Company's existing
10 per cent. dilution limits. Accordingly, in any ten-year period,
the Company may not issue (or grant rights to issue) more than 10
per cent. of the issued ordinary share capital of the Company under
the New Option Plan and any other (executive or otherwise) share
incentive plan adopted by the Company.
Treasury Ordinary Shares will count as new issue Ordinary Shares
for the purposes of this limit unless institutional investor
guidelines cease to require them to count.
The relevant issued ordinary share capital of the Company for
the purposes of the New Option Plan limit shall be the issued
ordinary share capital from time to time and, in respect of the
grant of the New Options, shall be the Enlarged Share Capital on
Admission.
Timing of grants
It is proposed that the New Options will be granted immediately
following Admission. It is not intended that any further New
Options will be granted under the New Option Plan. However, in the
event that the Remuneration Committee decides exceptionally to
grant subsequent New Options under the New Option Plan, such
subsequent New Options would be subject to the New Option Plan
limit above and may only be granted six weeks of the following: (i)
the end of any closed period under the Market Abuse Regulation (EU)
596/2014; (ii) the date of the Company's annual general meeting or
any general meeting; (iii) any day on which the Remuneration
Committee resolves that exceptional circumstances exist which
justify the grant of options (for example, in the case of
recruitment); (iv) any day on which changes to the legislation or
regulations affecting share plans are announced, effected or made;
or (v) the lifting of dealing restrictions which prevented the
granting of options during any period specified above.
Variation of share capital
In the event of any variation of the Company's share capital, a
demerger, payment of a special dividend or other corporate event
which materially affects the market price of the Ordinary Shares,
the Remuneration Committee may make such adjustment as it considers
appropriate to the number and/or class of Ordinary Shares subject
to a New Option and/or the exercise price payable. Such adjustments
are intended to preserve the value of New Options granted under the
New Option Plan.
Leaving employment
Generally, a new Option which has not been exercised will lapse
upon a participant's termination of employment with the Enlarged
Group.
However, if a participant ceases to be an employee of the
Enlarged Group due to their termination of employment by the
Company (other than where the Company is entitled to terminate
employment summarily), death, injury or disability (both as
evidenced to the satisfaction of the Remuneration Committee),
redundancy, retirement with the agreement of the Remuneration
Committee, their employing company or the business for which they
work being sold out of the Group or in other circumstances at the
discretion of the Remuneration Committee, then their New Option
will vest and may be exercised within six months from the date of
leaving or, in the case of death, within one year of the date of
death.
Corporate events
In the event of a change of control of the Company (not being an
internal corporate reorganisation), all New Options will vest and
become exercisable early.
In the event of an internal corporate reorganisation, the New
Options will be replaced by equivalent new options over shares in a
new holding company.
In the event of (i) a demerger, delisting, special dividend or
other similar event which, in the opinion of the Remuneration
Committee, would affect the market price of the Ordinary Shares to
a material extent, or (ii) any reverse takeover, merger by way of a
dual listed company or other significant corporate event, the
Remuneration Committee may decide that New Options shall vest early
or be adjusted on such basis as considered appropriate.
In any of the circumstances above, the Remuneration Committee
and the participant may agree with an acquiring company that New
Options will not vest in connection with the relevant corporate
event but instead be exchanged for equivalent options over shares
in the acquiring company.
Malus and clawback
The Remuneration Committee may reduce any unexercised New
Options (malus) or require the repayment of Ordinary Shares
received (clawback) any time prior to the third anniversary of the
date a New Option becomes exercisable where it determines that
there has been a material misstatement of the Company's financial
results or an error of calculation (including on account of
inaccurate or misleading information) or in the event of serious
misconduct, corporate failure or material reputational damage.
A malus and clawback determination may be satisfied by way of a
reduction in the amount of any future bonus, existing share award
and/or a requirement to make a cash payment.
Participants' rights
New Options under the New Option Plan will not confer any
Shareholder rights until the New Options have been exercised and
the participants have received the Ordinary Shares.
The New Options will not form part of the participant's
pensionable income.
Rights attaching to Ordinary Shares
Any Ordinary Shares allotted in respect of the New Option Plan
will rank equally with Ordinary Shares then in issue (except for
rights arising by reference to a record date prior to their
allotment).
Amendments and termination
The Remuneration Committee may, at any time, amend the New
Option Plan in any respect, provided that:
(a) no changes which are materially adverse to participants can
be made without a majority consent (determined by reference to the
number of Ordinary Shares under New Option) of the participants
affected by the change;
(b) the prior approval of the Company's Shareholders in general
meeting must be obtained for any amendments that are to the
advantage of participants in respect of the rules governing
eligibility, the terms of securities, cash or other benefit to be
provided and for the adjustment thereof (if any) if there is a
capitalisation issue, rights issue or open offer, sub-division or
consolidation of shares or reduction of capital or any other
variation of capital;
(c) no amendment is made which would mean that the New Option
Plan would cease to be an "employees' share scheme" as defined in
Section 1166 of the Companies Act 2006; and
(d) certain requirements continue to be met in relation to amendments to CSOP Options.
The requirement to obtain the prior approval of the participants
and the Company's Shareholders in general meeting will not,
however, apply to any minor alteration made to benefit the
administration of the New Option Plan, to take account of a change
in legislation or to obtain or maintain favourable tax, exchange
control or regulatory treatment for participants or for any company
in the Enlarged Group.
No New Options may be granted more than ten years after the date
of adoption of the New Option Plan.
IRREVOCABLE UNDERTAKINGS
The Company has received irrevocable undertakings from the
Directors that they will, or will procure that the legal
Shareholders will, vote in favour of the Resolutions at the General
Meeting in respect of 5,333,166 Ordinary Shares representing, in
aggregate, approximately 0.77 per cent. of the Existing Ordinary
Shares.
LOCK-INS AND ORDERLY MARKET ARRANGEMENTS
CRH has undertaken to the Company that it (or whichever of its
subsidiary undertakings shall participate in the Placing) will
agree not to dispose of any interest in the Ordinary Shares held by
them for a period of 9 months from the date of Admission and, for
the 3 months following that period, that they will only dispose of
their holdings through one or more of the Joint Bookrunners and in
such manner as they may direct so as to maintain an orderly market
in the Ordinary Shares. The Company has undertaken to the Nominated
Adviser and Joint Bookrunners not to give any consent or waiver, or
to modify the terms of the lock-in without the prior consent of the
Nominated Adviser and Joint Bookrunners.
APPIX I - DEFINITIONS AND GLOSSARY OF TECHNICAL TERMS
The following definitions apply throughout this announcement,
unless the context otherwise requires:
affiliate or affiliates an affiliate of, or person affiliated
with, a person; a person that,
directly or indirectly, or indirectly
through one or more intermediaries,
controls or is controlled by,
or is under common control with,
the person specified
Acquisitions the proposed acquisition by
the Company (in three separate
transactions) of: (i) the Deal
1 Targets, which constitutes
a reverse takeover pursuant
to Rule 14 of the AIM Rules
for Companies; (ii) the Deal
2 Target, subject to the Company
exercising its option to enter
into the UK SPA; and (iii) the
Deal 3 Target, subject to the
Polish Purchaser exercising
its option to enter into the
Polish SPA
--------------------------------------------
Act the Companies Act 2006 (as amended)
--------------------------------------------
Admission the re-admission of the Enlarged
Share Capital to trading on
AIM becoming effective in accordance
with Rule 6 of the AIM Rules
for Companies
--------------------------------------------
Admission Document the admission document to be
prepared by the Company in accordance
with the AIM Rules for Companies
in respect of Admission
--------------------------------------------
AIM AIM, a market operated by the
London Stock Exchange
--------------------------------------------
AIM Rules and UK MAR Committee the committee of the Board whose
remit is compliance with the
AIM Rules for Companies and
UK MAR
--------------------------------------------
AIM Rules for Companies the AIM rules for companies
published by the London Stock
Exchange from time to time
--------------------------------------------
AIM Rules for Nominated Advisers the AIM rules for nominated
advisers published by the London
Stock Exchange from time to
time
--------------------------------------------
Aqualung Aqualung Carbon Capture AS
--------------------------------------------
ArcelorMittal ArcelorMittal Global Holdings
S.L.R.
--------------------------------------------
Articles the articles of association
of the Company as in force as
at the date of this announcement
--------------------------------------------
Audit Committee the audit committee of the Board
--------------------------------------------
Baltic Aggregates Baltic Aggregates Oy, a subsidiary
of the Group registered in Finland
and focused on aggregate exports
from Finland to the Baltics
--------------------------------------------
Baltics Platform the Group's limestone and dolomite
operations, and part of Nordkalk,
covering the Baltics' markets
and including Baltic Aggregates
--------------------------------------------
BNP Paribas BNP PARIBAS of 16 boulevard
des Italiens, 75009 Paris, France
--------------------------------------------
Benelux Platform the Group's construction materials
platform covering the Benelux
market including GduH, B-Mix,
Goijens, Cube Beton and Stone
Holdings
--------------------------------------------
Björka Mineral Björka Mineral AB
--------------------------------------------
B-Mix collectively, B-Mix Beton NV,
J&G Overslag en Kraanbedrijf
BV and Top Pomping NV
--------------------------------------------
Board the Directors as at the date
of this announcement
--------------------------------------------
Bridge Loan a 1 year term loan of EUR125
million, with options to extend
in aggregate by 12 months, provided
by the Lenders to the Company
to part finance the Acquisitions
--------------------------------------------
Call Option Targets the Deal 2 Target and the Deal
3 Target
--------------------------------------------
Call Options together, the UK Call Option
and the Polish Call Option
--------------------------------------------
Carmeuse Carmeuse Holding S.A.
--------------------------------------------
Carrières du Boulonnais SAS Carrières du Boulonnais,
or CdB part of Groupe Carrières
du Boulonnais (Groupe CB)
--------------------------------------------
Carve Out the procedures required for
the carve out of certain businesses
and assets from the existing
businesses of CRH with the result
that such business and assets
are wholly-owned by the UK Target
and the Polish Target and therefore
capable of being acquired
--------------------------------------------
Casters Casters Beton NV
--------------------------------------------
CCP CCP Building Products Limited
--------------------------------------------
CDH or Carrières du Hainaut CDH Développement SA together
with its wholly owned subsidiaries
Carrières du Hainaut SCA
and CDH International SCA
--------------------------------------------
Closing Date (i) 4 January 2024, if the closing
conditions have been fulfilled
or waived by such date, or (ii)
any later date on which all
closing conditions have been
fulfilled or waived (as the
case may be), or at any other
time as the parties to the Master
Purchase Agreement may agree
--------------------------------------------
City Code the City Code on Takeovers and
Mergers published by the Panel
from time to time
--------------------------------------------
Company or SigmaRoc SigmaRoc plc, a public limited
company incorporated under the
laws of England and Wales with
registered number 05204176,
whose registered office is at
6 Heddon Street, London W1B
4BT, United Kingdom
--------------------------------------------
Conditions to the Polish Call (i) the Polish Purchaser having
Option received notice from the Polish
Seller that the Polish Carve
Out has been completed in accordance
with the Polish Call Option;
and (ii) the Target operating
the only burnt lime business
of the Polish Seller and its
Affiliates which is located
in Europe
--------------------------------------------
Conditions to the UK Call Option (i) the Company having received
notice from the UK Seller that
the UK Carve Out has been completed
in accordance with the UK Call
Option and (ii) the transaction
under the Master Purchase Agreement
having closed
--------------------------------------------
CREST the relevant system (as defined
in the CREST Regulations) for
paperless settlement of share
transfers and holding shares
in uncertificated form which
is administered by Euroclear
--------------------------------------------
CREST Regulations the Uncertificated Securities
Regulations 2001 (S.I. 2001
No. 3755) (as amended)
--------------------------------------------
CRH CRH plc (NYSE: CRH) (LSE:CRH),
an international group of diversified
building materials businesses
headquartered in Dublin, Ireland
--------------------------------------------
Czech Seller the seller of the Czech Target,
being CRH Europe Investments
B.V.
--------------------------------------------
Czech Target 75 per cent. of the issued share
capital of Vápenka Vito
š ov s.r.o.
--------------------------------------------
Deal 1 Acquisition the acquisition by the Company
of the Deal 1 Targets, which
comprises a reverse takeover
for the purposes of Rule 14
of the AIM Rules for Companies
--------------------------------------------
Deal 1 Completion completion of the Deal 1 Acquisition,
which shall occur on Admission
--------------------------------------------
Deal 1 Effective Date 1 January 2024, 00:01 hrs in
the relevant jurisdiction
--------------------------------------------
Deal 1 Sellers together, the German Seller,
the Czech Seller and the Irish
Seller, and each, a "Deal 1
Seller"
--------------------------------------------
Deal 1 Targets those Targets being acquired
by the Company in Deal 1, being
the German Target, Czech Target
and Irish Target, and each,
a "Deal 1 Target"
--------------------------------------------
Deal 2 Acquisition the acquisition of the Deal
2 Target, subject to and conditional
upon the Company exercising
its option to enter into the
UK SPA
--------------------------------------------
Deal 2 Sellers the UK Seller
--------------------------------------------
Deal 2 Target subject to and conditional upon
the Company exercising its option
to enter into the UK SPA, the
UK Target
--------------------------------------------
Deal 3 Acquisition the acquisition of the Deal
3 Target, subject to and conditional
upon the Polish Purchaser exercising
its option to enter into the
Polish SPA
--------------------------------------------
Deal 3 Seller the Polish Seller
--------------------------------------------
Deal 3 Target subject to and conditional upon
the Polish Purchaser exercising
its option to enter into the
Polish SPA, the Polish Target
--------------------------------------------
Directors the directors of the Company
as at the date of this announcement,
--------------------------------------------
EBITDA earnings before interest, tax,
depreciation and amortisation
--------------------------------------------
EEA European Economic Area
--------------------------------------------
Enlarged Group the Existing Group as it will
be on Admission, i.e. as enlarged
by the acquisition of the Deal
I Targets (but not the Deal
2 Target and Deal 3 Target)
--------------------------------------------
Enlarged Share Capital the issued Ordinary Shares upon
Admission, comprising the Existing
Ordinary Shares and the Fundraising
Shares
--------------------------------------------
Euroclear Euroclear UK & International
Limited, a company incorporated
under the laws of England and
Wales
--------------------------------------------
EUWA the European Union (Withdrawal)
Act 2018 (as amended)
--------------------------------------------
Executive Directors the executive Directors of the
Company, who as at the date
of this announcement, are David
Barrett, Max Vermorken and Garth
Palmer
--------------------------------------------
Existing Facility the syndicated senior credit
facility of up to approximately
GBP305 million arranged by Santander
UK and BNP Paribas
--------------------------------------------
Existing Group the Company and its subsidiary
undertakings as at the date
of this announcement
--------------------------------------------
Existing Ordinary Shares the 693,801,899 Ordinary Shares
in issue as at the date of this
announcement
--------------------------------------------
FCA the Financial Conduct Authority
--------------------------------------------
Form of Proxy the form of proxy for use by
holders of Existing Ordinary
Shares at the General Meeting
--------------------------------------------
Franzefoss Franzefoss AS, a Norwegian construction
materials group
--------------------------------------------
Fundraising the Placing and the REX Intermediaries
Offer
--------------------------------------------
Fundraising Shares the Placing Shares and the REX
Intermediaries Offer Shares
--------------------------------------------
FSMA the Financial Services and Markets
Act 2000 (as amended)
--------------------------------------------
GD Harries GDH (Holdings) Limited and its
subsidiary undertakings including
Gerald D. Harries & Sons Limited
--------------------------------------------
GDH or Granulat du Hainut Granulat du Hainaut SA
--------------------------------------------
German Intercompany Loan Receivables the receivables (including accrued
interest) owed by the German
Target to the relevant Deal
1 Sellers and their affiliates
(other than the Deal 1 Targets),
as outstanding as of the Deal
1 Effective Date, and to be
assigned to the Company upon
the acquisition of the Deal
1 Targets, substantially in
the form attached to the Master
Purchase Agreement
--------------------------------------------
German Purchaser SigmaCEN GmbH, a limited liability
company incorporated under German
law, registered in the commercial
register at the local court
of Charlottenburg under HRB
256485 B, a 100 per cent. subsidiary
of the Company
--------------------------------------------
German Seller the seller of the German Target,
being CRH Zehnte Vermögensverwaltungs
GmbH
--------------------------------------------
German Target Fels Holding GmbH, including
its fully owned (direct or indirect)
subsidiaries Fels-Werke GmbH,
Fels Netz GmbH and Fels Vertriebs
und Service GmbH & Co KG
--------------------------------------------
General Meeting the general meeting of the Company
to be held at 11.00 a.m. on
11 December 2023 at the offices
of Fieldfisher LLP, Riverbank
House, 2 Swan Lane, London ECR4
3TT, the Notice of which is
to be set out in the Admission
Document
--------------------------------------------
Goijens Gripeco BV and its 100 per cent.
owned subsidiaries Wegenbouw
Goijens NV, Goijens Recycling
NV and G&G Bentonpompen BV,
a Belgian group of companies
acquired by the Group in 2023
and which supplies ready-mixed
concrete and pumping solutions
in the north east of Belgium
--------------------------------------------
Greenbloc the Existing Group's cement
free ultra-low carbon precast
product range
--------------------------------------------
HMRC His Majesty's Revenue and Customs
--------------------------------------------
Intermediaries the intermediaries that were
appointed by the Company in
connection with the REX Intermediaries
Offer and who agreed to adhere
to and be bound by the Intermediaries
Terms and Conditions
--------------------------------------------
Intermediaries Agreement the booklet entitled "Intermediary
Agreement: REX Retail Offer"
and containing, amongst other
things, the Intermediaries Terms
and Conditions
--------------------------------------------
Intermediaries Terms and the terms and conditions agreed
between the Company, the REX
--------------------------------------------
Conditions Intermediaries Offer Co-ordinator
and the Intermediaries in relation
to the REX Intermediaries Offer,
and contained in the Intermediaries
Agreement
--------------------------------------------
Irish Seller the seller of the Irish Target,
being Irish Cement Limited
--------------------------------------------
Irish Target Clogrennane Lime Limited
--------------------------------------------
ISIN International Securities Identification
Number
--------------------------------------------
Issue Price 47.5 pence per Fundraising Share
--------------------------------------------
Johnston or JQG Johnston Quarry Group Limited,
Guiting Quarry Limited and their
subsidiary undertakings
--------------------------------------------
Joint Bookrunners BNP Paribas, Santander, Liberum
Capital, Peel Hunt and Redburn
--------------------------------------------
LafargeHolcim Holcim Ltd (SIX: HOLN) (XPAR:
HOLN), operating as LafargeHolcim,
a multinational producer of
construction materials
--------------------------------------------
LEI Legal Entity Identifier
--------------------------------------------
Lenders Santander and BNP Paribas (as
mandated lead arrangers and
bookrunners)
--------------------------------------------
Lhoist Lhoist S.A., a family-owned
lime, dolomite and mineral products
business, headquartered in Belgium
--------------------------------------------
Liberum Capital Liberum Capital Limited of Ropemaker
Place, Level 12, 25 Ropemaker
Street, London EC2Y 9LY, United
Kingdom
--------------------------------------------
London Stock Exchange London Stock Exchange plc
--------------------------------------------
LTIP the long term incentive plan
adopted by the Company, known
as the SigmaRoc Performance
Share Plan
--------------------------------------------
Master Purchase Agreement the conditional agreement entered
into by the Company, the German
Purchaser, the German Seller,
the Czech Seller and the Irish
Seller dated 22 November 2023
--------------------------------------------
MiFID II EU Directive 2014/65/EU on markets
in financial instruments
--------------------------------------------
New Facilities the new syndicated senior secured
credit facilities of up to EUR875
million, provided by the Lenders,
which comprises two facilities
being a senior facility consisting
of the Term Loan and RCF and
separate bridging loan facility
of the Bridge Loan which will
replace the Existing Facility
on drawdown under the New Facilities
--------------------------------------------
NK East Oy a company in the Nordkalk Group
incorporated and registered
in Finland, which is the holding
company of Nordkalk's Ukrainian
subsidiaries, Nordkalk Ukraine
TOV and NK Prykarpattya TOV
--------------------------------------------
New Option Plan the proposed new option plan
(to be known as the "Sigmaroc
plc Share Option Plan 2023")
to be adopted by the Company,
conditional on Admission and
subject to shareholder approval
--------------------------------------------
New Options the proposed new options to
be granted under the New Option
Plan, subject to shareholder
approval and Admission
--------------------------------------------
Nominated Adviser Liberum Capital
--------------------------------------------
Nomination Committee the nomination committee of
the Board
--------------------------------------------
Non-Executive Directors the Non-Executive Directors,
who as at the date of this announcement,
are Simon Chisholm, Jacques
Emsens, Axelle Henry and Tim
Hall
--------------------------------------------
Nordkalk Group Nordkalk and its subsidiary
undertakings as at the date
of this announcement
--------------------------------------------
Nordkalk Share Purchase Agreement the agreement dated 15 July
2021 made between the Company
and Rettig Group pursuant to
which the Company purchased
from Rettig Group the entire
issued share capital of Nordkalk
--------------------------------------------
Notice the notice of General Meeting
which will be set out in the
Admission Document
--------------------------------------------
NorFraKalk NorFraKalk SA, a Norway incorporated
joint venture company equally
owned by Nordkalk and Franzefoss
--------------------------------------------
Nordic a region comprising Finland,
Iceland, Norway, Denmark, Sweden,
and the Faroe Islands
--------------------------------------------
Nordkalk Nordkalk Oy Ab
--------------------------------------------
Nordkalk Group Nordkalk and its subsidiary
companies and undertakings
--------------------------------------------
Official List the Official List of the FCA
--------------------------------------------
Omya NK East Share Purchase Omya AG the agreement made between
Agreement the Company and Nordkalk dated
30 August 2021, pursuant to
which the Company acquired NK
East Oy for EUR1
--------------------------------------------
Option Plan the option plan adopted by the
Company in 2016
--------------------------------------------
Ordinary Shares ordinary shares of GBP0.01 each
in the capital of the Company
--------------------------------------------
Panel the Panel on Takeovers and Mergers
--------------------------------------------
Peel Hunt Peel Hunt LLP of 7(th) Floor
100 Liverpool Street, London,
EC2M 2AT, United Kingdom
--------------------------------------------
Placing the conditional placing of the
Placing Shares by the Joint
Bookrunners at the Issue Price
pursuant to the Placing Agreement
--------------------------------------------
Placing Agreement the agreement conditional upon,
inter alia, the passing of Resolutions
numbered 1 and 2, dated on or
around the date of this announcement
and made between the Company
and the Joint Bookrunners relating
to the Placing
--------------------------------------------
Placing Shares the, in aggregate, 421,052,631
new Ordinary Shares to be issued
by the Company pursuant to the
Placing
--------------------------------------------
Polish Call Option the option agreement entered
into by the Company and the
Polish Seller dated 22 November
2023, pursuant to which the
Polish Purchaser (at its sole
discretion) has the option to
acquire the Polish Target
--------------------------------------------
Polish Carve Out the Carve Out as it relates
to the Polish Target
--------------------------------------------
Polish Competition Office the Office of Competition and
Consumer Protection in Poland
--------------------------------------------
Polish Competition Office the clearances that the Polish
Purchaser is required to obtain
from
--------------------------------------------
Clearance the Polish Competition Office
in order to complete, subject
to the Polish Purchaser exercising
the Polish Call Option, the
acquisition of the Polish Target
--------------------------------------------
Polish Purchaser SigmaRoc plc, up to and until
such time as the Polish SPV
is incorporated and enters into
a deed of adherence in respect
of the Polish Call Option, wherein
it assumes the rights and obligations
of SigmaRoc plc (as purchaser)
in the Polish Call Option and
thereafter, the Polish SPV
--------------------------------------------
Polish Seller Trzuskawica S.A.
--------------------------------------------
Polish SPA the substantially agreed form
SPA attached to the Polish Call
Option
--------------------------------------------
Polish SPV the direct or indirect wholly-owned
subsidiary of the Company to
be incorporated in Poland for
the purpose of entering into
the Polish SPA
--------------------------------------------
Polish Target Ovetill Investments Sp. z o.o.
--------------------------------------------
Polish Target Completion subject to and conditional upon
the Polish Purchaser exercising
the Polish Call Option, completion
of the acquisition of the entire
issued share capital of the
Polish Target by the Polish
Purchaser
--------------------------------------------
Poundfield Poundfield Products (Group)
Limited and its subsidiary undertakings,
including Poundfield Precast
--------------------------------------------
Poundfield Precast Poundfield Precast Limited
--------------------------------------------
PPG the Existing Group's Precast
Products Group platform based
in the UK
--------------------------------------------
Proposals together, the Acquisitions,
the Fundraising, Admission and
other matters described in this
Announcement
--------------------------------------------
Prospectus Regulation Prospectus Regulation (EU) 2017/1129
--------------------------------------------
Prospectus Regulation Rules the prospectus regulation rules
made by the FCA under Part VI
of FSMA, as amended
--------------------------------------------
QIB a qualified institutional buyer
as defined in Rule 144A
--------------------------------------------
QCA Code the QCA Corporate Governance
Code published by the Quoted
Companies Alliance from time
to time
--------------------------------------------
RCF a revolving credit facility
of EUR150 million provided by
the Lenders to the Company
--------------------------------------------
Redburn Atlantic Redburn (Europe) Limited of
2(nd) Floor,10 Aldermanbury,
London, EC2V 7RF, United Kingdom
--------------------------------------------
Remuneration Committee the remuneration committee of
the Board
--------------------------------------------
Resolutions the resolutions to be proposed
at the General Meeting
--------------------------------------------
Rettig Group Rettig Group Oy Ab
--------------------------------------------
Reverse Takeover the proposed acquisition by
the Company of the Deal I Targets
--------------------------------------------
REX Intermediaries Offer the offer of the REX Intermediaries
Offer Shares to the Intermediaries
using the Peel Hunt REX portal
--------------------------------------------
REX Intermediaries Offer Co-Ordinator Peel Hunt LLP
--------------------------------------------
REX Intermediaries Offer Shares the new Ordinary Shares to be
issued by the Company pursuant
to the REX Intermediaries Offer
--------------------------------------------
Ronez Ronez Limited, the Existing
Group's Channel Islands based
business
--------------------------------------------
RTO Option Plan the option plan adopted by the
Company in 2016, which was conditional
upon the acquisition of Ronez
--------------------------------------------
Regulation S Regulation S promulgated under
the Securities Act
--------------------------------------------
Rule 144A Rule 144A under the Securities
Act
--------------------------------------------
S&P S&P Global Inc. (NYSE:SPGI)
--------------------------------------------
Santander Banco Santander, S.A. (LON:
BNC), a multinational banking
group operating as Santander
Group
--------------------------------------------
Santander UK the UK branch of the Santander
business
--------------------------------------------
Scheduled Deal 1 Completion 4 January 2024
Date
--------------------------------------------
Shareholder a holder of Ordinary Shares
--------------------------------------------
SEDOL Stock Exchange Daily Official
List
--------------------------------------------
Sellers means the respective sellers
of each of the Targets, being:
(i) in respect of the Deal 1
Acquisition, the German Seller,
the Czech Seller and the Irish
Seller and; (ii) in respect
of the Deal 2 Acquisition, the
UK Seller; and (iii) in respect
of the Deal 3 Acquisition, the
Polish Seller
--------------------------------------------
SKOY Suomen Karbonaatti Oy, a joint
venture company between Nordkalk
(51 per cent.) and Omya Oy (49
per cent.), a subsidiary of
Switzerland-based industrial
minerals company Omya
--------------------------------------------
SPA share purchase agreement
--------------------------------------------
Stone Holdings Stone Holdings S.A.
--------------------------------------------
Targets each of the German Target, Czech
Target, Irish Target, Polish
Target and UK Target
--------------------------------------------
Term Loan a five year term loan of EUR600
million provided by the Lenders
to the Company to part finance
the Acquisitions and to pay
financing costs
--------------------------------------------
TUPE the Transfer of Undertakings
(Protection of Employment) Regulations
2006, as amended
--------------------------------------------
UK the United Kingdom of Great
Britain and Northern Ireland
--------------------------------------------
UK Call Option the option agreement entered
into by the Company and the
UK Seller dated 22 November
2023, pursuant to which the
Company (at its sole discretion)
has the option to acquire the
UK Target
--------------------------------------------
UK Carve Out the Carve Out as it relates
to the UK Target
--------------------------------------------
UK SPA the substantially agreed form
SPA attached to the UK Call
Option
--------------------------------------------
UK MAR the UK version of the EU Market
Abuse Regulation (596/2014)
as it forms part of the retained
EU law as defined in the EUWA
--------------------------------------------
UK Prospectus Regulation the UK version of the Prospectus
Regulation as it forms part
of EU retained law by virtue
of the EUWA
--------------------------------------------
UK Seller the seller of the UK Target,
being Tarmac Cement and Lime
Limited
--------------------------------------------
UK Target Tarmac Shelfco Limited
--------------------------------------------
UK Target Completion subject to and conditional upon
the Company exercising the UK
Call Option, completion of the
acquisition of the entire issued
share capital of the UK Target
by the Company
--------------------------------------------
uncertificated or in uncertificated recorded on a register of securities
form maintained by Euroclear in accordance
with the CREST Regulations as
being in uncertificated form
in CREST and title to which,
by virtue of the CREST Regulations,
may be transferred by means
of CREST
--------------------------------------------
US Securities Act the United States Securities
Act of 1993, as amended
--------------------------------------------
Verdalskalk Verdalskalk AS, a joint venture
company incorporated in Norway,
in which Nordkalk holds a 10
per cent. equity interest
--------------------------------------------
References to a "company" in this announcement shall be
construed so as to include any company, corporation or other body
corporate, wherever and however incorporated or established.
Words importing the singular shall include the plural and vice
versa, and words importing the masculine gender shall include the
feminine or neutral gender.
For the purpose of this announcement, "subsidiary" and
"subsidiary undertaking" have the meanings given by the Companies
Act 2006.
GLOSSARY OF TECHNICAL TERMS
degC degrees Celsius
degF degrees Fahrenheit
--------------------------------------------------
Adjusted Leverage Ratio the comparison of net debt to Underlying
EBITDA for the last twelve months adjusted
for pre-acquisition earnings of subsidiaries
acquired during the year
--------------------------------------------------
aggregate aggregates are small rock fragments
(typically 0.08mm to 80mm in diameter)
of mineral origin. Aggregates come in
different types: maritime, fluvial and
terrestrial. They may be sand, gravel
or crushed gravel. Aggregates, mixed
with water and cement, are essential
for the production of concrete
--------------------------------------------------
aragonite a carbonate mineral, one of the three
most common naturally occurring crystal
forms of calcium carbonate
--------------------------------------------------
ASP average selling price
--------------------------------------------------
asphalt a mixture of bitumen and mineral aggregates
used in the construction of road and
car park surfaces
--------------------------------------------------
Baltics a geographical area compromising Estonia,
Latvia and Lithuania and is bounded
on the west and north by the Baltic
Sea
--------------------------------------------------
Benelux a collective name for Belgium, the Netherlands
and Luxembourg
--------------------------------------------------
Bluestone a high value blue coloured decorative
limestone extracted from the Existing
Group's CDH quarry, which has distinct
characteristics and is a Global Heritage
Resource
--------------------------------------------------
CaCO3 or calcium carbonate calcium carbonate, a substance found
in sedimentary rocks such as limestone,
predominately in the crystalline forms
of calcite and aragonite
--------------------------------------------------
CAGR compound annual growth rate
--------------------------------------------------
calcination a heating process whereby a substance
is purified and, as used specifically
in this announcement, the transformation
of limestone to lime
--------------------------------------------------
calcite is a carbonate mineral and the most
stable polymorph of calcium carbonate
--------------------------------------------------
calcium silicate a lightweight, porous, chalky material,
which is used for insulation, being
suitable for temperatures up to 1200degF
(649degC), as an anticaking agent in
food production and as an antacid
--------------------------------------------------
CaO or calcium oxide calcium oxide, otherwise known as quicklime
or burnt lime
--------------------------------------------------
CapEx capital expenditure
--------------------------------------------------
CaS or calcium sulphide calcium sulphide, a substance produced
in steel manufacturing when limestone
reacts with sulphur, which goes into
slag
--------------------------------------------------
causticising a reaction in which sodium carbonate
in green liquor reacts with calcium
hydroxide from the slaker to form sodium
hydroxide and calcium carbonate
--------------------------------------------------
CBAM Cross Border Adjustment Mechanism is
an EU carbon border tax, with the aim
of reducing carbon emissions
--------------------------------------------------
CCUS carbon capture utilisation and storage
--------------------------------------------------
cement cement is a hydraulic bonding agent
which is obtained by heating, then grinding,
a mixture of limestone and clay. Most
cements are made from clinker and additives
and are usually used in the form of
a powder. Cement sets when mixed with
water. Combined with sand and aggregates
(sand or gravel), it turns into rock-hard
concrete or mortar
--------------------------------------------------
CO2 carbon dioxide
--------------------------------------------------
concrete concrete is a building material made
by mixing water, aggregates and sand
with a binding agent (usually cement)
and, if necessary, with additives. This
mixture is made on building sites and
in factories
--------------------------------------------------
CRIRSCO Committee for Mineral Reserves International
Reporting Standards
--------------------------------------------------
DRI direct reduced iron, produced from the
direct reduction of iron ore (in the
form of lumps, pellets, or fines) into
iron by a reducing gas or elemental
carbon produced from natural gas or
coal
--------------------------------------------------
DWT deadweight tonnage, a measure of how
much weight a ship can carry and is
the sum of the weights of cargo, fuel,
fresh water, ballast water, provisions,
passengers and crew
--------------------------------------------------
dolomite an anhydrous calcium magnesium carbonate
mineral with a chemical composition
of CaMg(CO3)2
--------------------------------------------------
E1, E2, etc. a resource product classification tool
of environmental-social-economic viability,
as administered by UNFC
--------------------------------------------------
eCO2 embodied CO2
--------------------------------------------------
EAF electric arc furnace, is a furnace that
heats material by means of an electric
arc
--------------------------------------------------
EPS Earnings Per Share
--------------------------------------------------
ESG environmental, social and governance
--------------------------------------------------
ETS European Trading Systems
--------------------------------------------------
EU the European Union
--------------------------------------------------
EUA Emission Unit Allowances
--------------------------------------------------
EUETS EU Emissions Trading System
--------------------------------------------------
EuLA European Lime Association
--------------------------------------------------
EUR Euro
--------------------------------------------------
CZK Czech Crown
--------------------------------------------------
F1, F2, etc. a resource product classification tool
of technical viability, as administered
by UNFC
--------------------------------------------------
G1, G2, etc. a resource product classification tool
of confidence in an estimate, as administered
by UNFC
--------------------------------------------------
GCC ground calcium carbonate
--------------------------------------------------
GDP gross domestic product
--------------------------------------------------
GHG greenhouse gas
--------------------------------------------------
Ha a hectare is a non-SI metric unit of
area equal to a square with 100-metre
sides (1hm(2) ), or 10,000m(2) , and
is primarily used in the measurement
of land
--------------------------------------------------
H2O the chemical formula for water
--------------------------------------------------
igneous rock a rock that has formed through the cooling
and solidification of magma or lava
--------------------------------------------------
ISO14001 the international standard for environmental
management systems, designed by the
International Organisation for Standardisation
(ISO) to help businesses and other organisations
to reduce their environmental impact
--------------------------------------------------
ISO 18001 and 45001 the international standards for health
and safety management systems designed
by the ISO
--------------------------------------------------
kg kilogram
--------------------------------------------------
kt thousand tonnes
--------------------------------------------------
ktpa thousand tonnes per annum
--------------------------------------------------
LFL like-for-like comparative with relevant
prior period prepared on a pro-forma
basis
--------------------------------------------------
licence, lease or permit any form of licence, permit, lease or
other entitlement granted by the relevant
Government department in accordance
with its mining legislation that confers
on the holder certain rights to explore
for and/or extract minerals that might
be contained in the land, or ownership
title that may prove ownership of the
minerals
--------------------------------------------------
lime or quicklime a limestone product with the chemical
formula CaO, produced by heating limestone
at high temperatures in kilns, which
has a range of uses, including in the
production of iron and steel, paper
and pulp production, treatment of water
and flue gases and in the mining industry
--------------------------------------------------
limestone is a sedimentary rock composed primarily
of the calcite and aragonite minerals,
both of which are formed from calcium
carbonate
--------------------------------------------------
Mt million tonnes
--------------------------------------------------
Mtpa million tonnes per annum
--------------------------------------------------
MWh megawatt-hour, a unit for measuring
power that is equal to 1,000 kilowatts
of electricity being used continuously
for one hour
--------------------------------------------------
NATO North Atlantic Treaty Organization
--------------------------------------------------
OEM original equipment manufacturer
--------------------------------------------------
PAC price adjustment clause
--------------------------------------------------
PCC precipitated calcium carbonate
--------------------------------------------------
PPB pulp, paper & board
--------------------------------------------------
PERC Pan European Reserves and Resources
Reporting Committee which administers
the PERC Code
--------------------------------------------------
PERC Code the code of that name for the reporting
of exploration results, mineral resources
and mineral reserves and which sets
out minimum standards, recommendations
and guidelines for the United Kingdom,
Ireland and Europe, as administered
by PERC
--------------------------------------------------
pH a logarithmic scale used to measure
of how acidic/basic a solution is. The
pH scale ranges from 0 to 14, with 7
being neutral. pHs of less than 7 indicate
acidity, whereas a pH of greater than
7 indicates a base
--------------------------------------------------
PLN Polish Zloty
--------------------------------------------------
SASB sustainability accounting standards
board
--------------------------------------------------
slag the silicon dioxide and metal oxide
mixture left over as a by-product of
extracting metal from its ore during
the smelting process
--------------------------------------------------
SBTi Science Based Targets initiative
--------------------------------------------------
SG&A Selling, General & Administrative
--------------------------------------------------
slaking the process of adding water to calcium
oxide (lime) to produce calcium hydroxide
(slaked lime or hydrated lime)
--------------------------------------------------
SONIA Sterling Overnight Index Average
--------------------------------------------------
stack large industrial chimneys designed to
emit and disperse hot air, particulate
matter, and pollutants into the atmosphere
at such a height as to not constitute
a danger to surrounding life on the
ground
--------------------------------------------------
Reserves In the case of all members of the Existing
Group other than Nordkalk, Reserves
represent the estimate of the part of
a Resource that has more certainty and
considers non geological factors such
as permitting, feasibility assessments,
social and environmental factors, and
also factors diluting materials and
allowances for losses, which may occur
when the material is mined or extracted.
In the case of Nordkalk, the estimate
of reserves which represents a 'commercial
project' pursuant to the UNFC classification
system, where the relevant permitting
has been approved and the E1, F1 and
G1 or G2 criteria under UNFC are met.
--------------------------------------------------
Resources a concentration or occurrence of solid
material of economic interest in or
on the Earth's crust in such form, grade
or quality and quantity that there are
reasonable prospects for eventual economic
extraction. The location, quantity,
grade or quality, continuity and other
geological characteristics are known,
estimated or interpreted from specific
geological evidence and knowledge, including
sampling. In the case of all members
of the Existing Group other than Nordkalk,
Resources represent the estimate of
the potentially viable mineable minerals.
In the case of Nordkalk, Resource estimates
represent the estimate of potential
reserves where the E2, F2 and G1, G2
or G3 criteria under UNFC classification
are met.
--------------------------------------------------
TCFD task force on climate-related financial
disclosures
--------------------------------------------------
tpa tonnes per annum
--------------------------------------------------
tph tonnes per hour
--------------------------------------------------
underlying in relation to stated financial figures,
such as EBITDA, earnings per share and
profit before tax, underlying figures
are stated before acquisition related
expenses, certain finance costs, redundancy
and reorganisation costs, impairments,
amortisation of acquisition intangibles
and share option expense
--------------------------------------------------
UNFC United Nations Framework Classification
for Resources
--------------------------------------------------
wharves plural of wharf, a structure on the
shore of a harbour or on the bank of
a river or canal where ships may dock
to load and unload cargo or passengers
--------------------------------------------------
wollastonite a naturally occurring mineral which
is a chemical combination of calcium,
silicon and oxygen. It is formed when
limestone, or other high-calcium rocks,
undergo high temperature and pressure
changes sometimes in the presence of
silica-bearing fluids such as in skarns
or contact metamorphic rocks.
--------------------------------------------------
APPIX II - RISK FACTORS
Investing in and holding Ordinary Shares involves financial
risk. Prospective investors in the Ordinary Shares should carefully
review all of the information contained in this announcement and
should pay particular attention to the following risks associated
with an investment in the Ordinary Shares, the Enlarged Group's
business and the industry in which it participates prior to making
an investment decision.
The risk factors set out below apply to the Enlarged Group as at
the date of this announcement.
The risks and uncertainties described below are not an
exhaustive list, are not set out in any order of priority and do
not necessarily comprise all, or explain all, of the risks
associated with the Enlarged Group and the industry in which it
participates or an investment in the Ordinary Shares. They comprise
the material risks and uncertainties in this regard that are known
to the Existing Group and should be used as guidance only.
Additional risks and uncertainties relating to the Enlarged Group
and/or the Ordinary Shares that are not currently known to the
Existing Group, or which the Existing Group currently deems
immaterial, may arise or become (individually or collectively)
material in the future, and may have a material adverse effect on
the Enlarged Group's business, results of operations, financial
condition and prospects. If any such risk or risks should occur,
the price of the Ordinary Shares may decline and investors could
lose part or all of their investment. There can be no certainty
that the Enlarged Group will be able to implement successfully its
growth strategy as is detailed in this announcement. No
representation is or can be made as to the future performance of
the Enlarged Group and there can be no assurance that the Enlarged
Group will achieve its objectives.
Prospective investors should consider carefully whether an
investment in the Ordinary Shares is suitable for them in the light
of the information in this announcement and their personal
circumstances. Prospective investors should consult a legal
adviser, an independent financial adviser or a tax adviser for
legal, financial or tax advice if they do not understand any part
of this announcement.
RISKS RELATING TO THE ACQUISITIONS AND THE TARGETS
The due diligence carried out in respect of the Targets may not
have revealed all relevant facts or uncovered significant
liabilities
Whilst the Company conducted due diligence, such as legal, tax,
financial and technical, in respect of the Acquisitions with the
objective of identifying any material issues that may affect its
decision to proceed with the Acquisitions, there can be no
assurance that all such issues have been identified. The Company
also used information revealed during the due diligence process to
formulate its business and operational planning. During the due
diligence process, the Company is only able to rely on the
information that was made available to it. Any information that was
provided or obtained from available sources may not have been
accurate at the time of delivery and/or remained accurate during
the due diligence process and in the run-up to the Acquisitions and
not all information requested has been provided. Notwithstanding
the aforesaid, the Company believes its diligence is reasonable and
appropriate based on the facts and information made available to
it. Whilst the Company is of the opinion that sufficient
information has been made available for its purposes based upon its
current knowledge of the Targets, there can be no assurance that
the due diligence revealed all relevant facts or uncovered all
significant liabilities. If the due diligence investigation failed
to identify key information in respect of the Targets, or if the
Company considered certain material risks to be commercially
acceptable, the Company may be forced to write-down or write-off
assets in respect of the Targets, which may have a material adverse
effect on the Enlarged Group's business, financial condition or
results of operations. In addition, following the Acquisitions, the
Company may be subject to
significant, previously undisclosed liabilities in respect of
the Targets that were not known or identified during due diligence
and which could have a material adverse effect on the Enlarged
Group's business, financial condition and results of
operations.
Furthermore, as is customary when investigating companies for
the purposes of an acquisition, as part of its due diligence the
Company has uncovered a variety of matters in the Targets which
could be improved upon (which span a variety of areas including but
not limited to contractual terms, employment terms, property, land
and real estate title, planning consents and use, compliance with
planning law and regulation, environmental liabilities, permitting
and regulatory issues, data protection and IP and domain name
protection). The Company and the Board assess these matters as
relatively minor in the context of the Acquisitions and their
intention is to address these post Admission to the extent it is
considered prudent to do so in the context of the Enlarged
Group.
Whilst the Company has received a form of contractual comfort
pursuant to the warranties and indemnities contained in the Master
Purchase Agreement, there is no guarantee that such arrangements
will provide adequate compensation for the Company for any loss or
liability arising from any undisclosed liabilities, issues or
defects that may arise in relation to the Targets. This could have
a material adverse effect on the financial position of the Enlarged
Group.
There are limitations to the protection afforded to the Company
pursuant to the warranties and indemnities contained in the Master
Purchase Agreement
Warranties under the Master Purchase Agreement are subject to
certain limitations and are limited in scope.
In relation to the business warranties, should the relevant
breaches fall below the individual and aggregate thresholds, the
liability in relation to such breaches will sit with the Existing
Group. Additionally, the aggregate liability for all breaches of
business warranties is capped.
Accordingly, the Company may incur substantial losses if a
breach of a business warranty occurs which falls below the
thresholds or exceeds the liability cap, or a matter arises which
is not protected by warranties under the Master Purchase Agreement.
This could have a material adverse effect on the Enlarged Group's
business results of operations and financial condition.
The Targets' results may not match the Board's expectations
If the results and cash flows generated by the Targets are not
in line with the Company's expectations, it may materially impact
on the financial performance of the Enlarged Group which could have
an adverse effect on the Enlarged Group's financial position and
share price. Demand for the Targets products are influenced by
multiple factors, including global and national economic
circumstances, monetary policy, consumer sentiment, variations in
fuel and other input costs amongst other factors. The Target's
results may be adversely impacted by negative trends in these
factors. In addition, any goodwill that arises on the Acquisitions
may be required to be written down, which, while having no cash
impact, could have an adverse effect on the Enlarged Group's
financial position and share price.
There can be no assurance that the Enlarged Group will realise
the anticipated benefits and synergies of the Acquisitions
The Enlarged Group may not realise the anticipated benefits and
synergies of the Acquisitions or may encounter difficulties in
achieving the same. The Enlarged Group is subject to all of the
risks set forth in this "Risk Factors" section which may impact the
Enlarged Group's ability to realise the benefits and synergies its
Directors believe will result from the Acquisitions. In addition,
if the future financial performance and cash flows generated by the
Enlarged Group are not in line with the Directors' expectations, or
the mineral resource is not of the quality, or is not present in
the volumes that the Directors expect, it may significantly affect
the financial performance of the Enlarged Group. This could reduce
the potential benefits and synergies arising from the Acquisitions,
adversely affect the market price of the Ordinary Shares, or have a
material adverse effect on the Enlarged Group's business, financial
condition, operating results and prospects.
The German Target is currently in negotiations with a key
customer in Germany
The German Target is currently negotiating a new supply
agreement with a significant customer which will also require a
supply of differently composed products.
In order to offer the products required and secure exclusivity
under the new supply agreement, capital expenditures of the German
Target in an amount of approximately one fourth of the annual
revenue generated with the customer is necessary. The German Target
and the customer are currently negotiating the new framework
agreement with a first phase of delivery of new products to take
effect in 2026. A full transfer of delivery of new products (and
final phase-out of delivery of existing products) is expected with
implementation of the third phase by the customer in 2033.
Written agreements between members of the Targets and key
customers and key suppliers have expired or are on unwritten
terms
Certain material suppliers and customers of the Targets are
doing business with the Targets without legally binding written
agreements. Whilst these suppliers and customers have been
operating in this way for some time, there is a risk that in the
absence of written terms there may be disagreements as to the terms
of business or the services may be terminated or discontinued
without notice. In addition, certain agreements have expired. It
has been confirmed during due diligence in most respects that
services have continued. Following completion of the Acquisitions,
the Company will be taking steps to seek to ensure that all key
suppliers and customers are legally bound by written
agreements.
Certain contractual arrangements have onerous terms, including
change of control provisions and unilateral termination rights
The Targets contract with a variety of counterparties, including
customers and suppliers, in relation to its products. Certain
contracts, including with key customers and suppliers, contain
provisions which might ordinarily be regarded as unusual or
onerous, including without limitation termination rights at short
notice, change of control provisions, uncapped liability for the
Targets and financial penalties.
To the extent that the Company wishes to keep these arrangements
in place following completion of the Acquisitions, the Company may
require the consent of third parties, which may not be forthcoming.
In addition, counterparties may exercise their unilateral right of
termination (or threaten to do so) in order to obtain more
advantageous commercial and legal terms for themselves, putting the
Targets in a commercially worse position than they were prior to
the Acquisitions. In the event that contracts are terminated or are
renegotiated to the counterparty's advantage, the operations and
revenues of the Enlarged Group may be affected commensurately.
There are inherent environmental risks in the sector that the
Enlarged Group operates
Quarrying operations and the production of the Enlarged Group's
products have inherent risks and liabilities associated with damage
to the environment and the disposal of waste products occurring as
a result of exploration and production. Environmental and safety
legislation and regulation (e.g. in relation to reclamation,
disposal of waste products, pollution and protection of the
environment, protection of wildlife and otherwise relating to
environmental protection) is frequently changing and is generally
becoming more restrictive with a heightened degree of
responsibility for companies and their directors and employees and
more stringent enforcement of existing laws and regulations. Future
changes could impose significant costs and burdens on the Enlarged
Group (the extent of which cannot be predicted) both in terms of
compliance and potential penalties, liabilities and remediation.
Investor sentiment may also change and there is a risk that
investors turn away from sectors which have potentially negative
environmental impacts. Breach of any environmental obligations
could result in penalties and civil liabilities and/or suspension
of operations, any of which could adversely affect the Enlarged
Group. Further, approval may be required for any material plant
modifications or additional land clearing and for ground disturbing
activities. Delays in obtaining such approvals could result in the
delay to anticipated exploration programmes or mining
activities.
The Enlarged Group will need to apply for new permits to
maintain or increase the level of future production at several of
its sites of operation. In addition, following the Acquisitions,
certain of the Targets will need to apply for entirely new
environmental, planning and other licences. There is no guarantee
that these new permits or requested changes to existing permits
will be granted. For example, the permitting application processes
may be adversely affected or ultimately fail due to environmental
concerns, including greenhouse gases, protected species and
complaints from local inhabitants. Any environmental issues
encountered will likely increase the expense and timeline for the
permitting process and decrease the ultimate likelihood of success.
Ultimately if they are not granted, the current or intended use of
the site and the operations may not be able to be continued.
There may also be unforeseen environmental liabilities resulting
from quarrying and other activities, which may be costly to remedy.
If the Enlarged Group is unable to fully remedy an environmental
problem, it may be required to stop or suspend relevant operations
or enter into interim compliance measures pending completion of the
required remedy. The potential exposure may be significant and
could have a material adverse effect on the Enlarged Group. The
Enlarged Group is currently evaluating the costs of insurance for
environmental risks (including potential liability for pollution or
other hazards as a result of the disposal of waste products
occurring from production).
Whilst the Company has carried out legal, financial and
technical due diligence on the Targets, it has not been able to
fully assess certain aspects of the Targets' businesses, or visit
every site of operation, including a full assessment of the
Targets' compliance with applicable environmental laws and
regulations or visit every site of operation. Where possible,
warranties and other comfort has been sought from the Sellers in
the Master Purchase Agreement but there can be no guarantee that a
Target is not later found to be in breach of applicable law and
regulation and may be requested to remedy any such breaches at its
own cost or else may incur additional liabilities (including fines
and censures) in respect of the same or else be forced to
discontinue operations.
In particular, a number of sites in Sweden have been registered
as contaminated properties in the national register of contaminated
properties, including the Storugns and Köping ports and there is
therefore a potential financial liability attached to this
registration. In Sweden, registration is automatic for any site
with operations that contaminate or could potentially contaminate
the land.
Environmental hazards may exist on the properties in which the
Enlarged Group holds interests that are unknown to the Company and
that have been caused by previous or existing owners or operators
of the properties. To the extent the Enlarged Group is subject to
environmental liabilities, the payment of any liabilities or the
costs that may be incurred to remedy environmental impacts would
reduce funds otherwise available for operations. However,
compensation can often be claimed from previous landowners if they
were the polluters.
The Enlarged Group may assume responsibility for restoration and
decommissioning costs
Upon cessation of any quarrying operations, the Enlarged Group
may assume responsibility for costs associated with restoring the
operational sites by taking reasonable and necessary steps in
accordance with generally accepted environmental practices. Any
environmental permits held by the Enlarged Group may also specify
commitments to specific restoration activities on a site. However,
some restoration provisions can be advantageous to the company,
such as restoring excavations as inert landfill sites or
tourist/commercial attractions such as water parks or nature
reserves.
The remediation works at one landfill in Germany are required to
be concluded by 2035, with certain parts to be concluded by May
2030. The operation cannot be fully undertaken as part of the land
affected is not currently owned by the Targets. The Enlarged Group
will take steps to seek to acquire the required properties
following completion of the Acquisitions. If the required
properties are not purchased, the Enlarged Group may need to seek
amendments to the existing remediation plans which may be cost
intensive and consume significant operational and financial
resources.
There are risks and uncertainties relating to title to land and
properties held by the Targets
While the Company has to the extent possible investigated the
Targets' title to, and rights and interests in, the land and
properties held by the Targets this should not be construed as a
guarantee that they are all in good title. Title to the land and
properties may be subject to undetected defects, including third
party rights and covenants. If a defect does exist and it is
successfully challenged, it is possible that the Enlarged Group may
lose all or part of its interest in the relevant land. In addition,
there are patches of landlocked sites (i.e. land not owned by the
Targets) or possible ransom strips within the area of operations
which the Targets may need access to. Some parcels of land in the
Targets' demise are encumbered with a limited personal easement
waiving mining damage. The encumbrance of real property with mining
damage waivers could lead to issues for the financing of the real
property (especially with non-regional banks that are not familiar
with the subject). Should title to any real estate be challenged or
revoked, it may have a significant effect on the operations and
therefore of the financial results of the Enlarged Group.
There is no guarantee that the Targets will be integrated
successfully
How the acquired Targets' businesses will perform as part of the
wider Enlarged Group is difficult to predict and may not meet
predictions and expectations. Though businesses within the Enlarged
Group are expected to continue to operate under existing management
in line with the Existing Group's decentralised strategy, the
integration of the Targets will be essential to ensure that
efficiencies can be achieved, and the success of such integration
cannot be guaranteed. The acquisition of the Targets will expose
the Enlarged Group to potential risks associated with the
assimilation of new technologies and personnel, unforeseen or
hidden liabilities, the diversion of management attention and
resources from the Enlarged Group's existing businesses and the
inability to generate sufficient revenues to offset the costs and
expenses associated with such acquisitions.
Customer concentration of the Targets
The Targets' largest customers represent a significant
proportion of the Targets' revenues across the period covered by
the historical financial information. Accordingly, there is a
significant level of customer concentration, for example the top 10
customers in a jurisdiction contribute over 60 per cent. of product
revenue over a number of years. While the majority of these are
longstanding relationships of over 5 years, the loss of a key
customer could have a material effect on the relevant Target's
business, results of operations, financial condition and/or growth
prospects and, potentially in turn, those of the Enlarged
Group.
Hedging arrangements in relation to CO2
The Targets and CRH have historically entered into
forward-hedging contracts for the purchase of CO2 allowances in
order to mitigate potential increases in the market rate of CO2
allowances and any lag between the Targets' input costs and price
negotiations with customers. CO2 allowances are used to fund the
net CO2 emission deficit, and the Targets are required to acquire
sufficient allowances to cover this net deficit.
Throughout the period covered by the historical financial
information, the Targets benefited from their hedging arrangements
following a period of sustained increases in the market price of
CO2 allowances and during which there was a lag in raising the
Targets' ASP to reflect this movement. Going forward the Enlarged
Group intends to continue with its existing hedging strategy to
also incorporate the Targets. However, there is no guarantee that
the Enlarged Group's hedging strategy will continue to be effective
or fully offset any increase in input costs or that the Targets
will be able to factor increased CO2 price increases into customer
pricing negotiations and the Targets' ASP. This may impact future
performance and ability to fund longer term capex requirements
which are required to accommodate the continued decline in free
carbon allowances from the EU and UK ETS.
There was a level of groupwide energy cost hedging up to the end
of FY21 and hedging in selected markets in FY22. Since then, and
given high market cost inflation, each of the Targets has largely
made its own local arrangements with suppliers. Hedging has not
been a focus in FY23 given softening energy indices and passthrough
mechanisms in place. The Targets management has decided not to
hedge in FY24, reflecting the fact that the spot price is lower
than hedging, and the ability to pass through energy costs to
customers via the energy surcharge. There is a risk that deciding
not to implement groupwide energy cost hedging has a negative
financial effect on the Enlarged Group.
Intellectual property rights and domain names
The Company has identified a portfolio of intellectual property
and domain names relevant to the business of the Targets. The
portfolio is comprised of patents, trade marks, trade mark
applications and domain names. There is no assurance that the
intellectual property identified constitutes all of the
intellectual property relevant to the business of the Targets.
Furthermore, some intellectual property rights and domain names are
not registered in the name of the Targets. As such, these will need
to be transferred or assigned to the Targets prior to completion of
the Acquisitions. If the Targets do not acquire ownership or the
right to use all of the intellectual property and domain names
considered relevant to their business, it may result in a material
adverse effect on the Enlarged Group's business, financial
condition and prospects. There is also no guarantee that any of the
trade mark applications identified as relevant to the Targets will
proceed to grant.
Employees of the Targets are members of trade unions
The Enlarged Group may be limited in its flexibility in dealing
with its staff, including those of the Targets, due to wide ranging
trade union membership amongst employees. If there is a material
disagreement between the Enlarged Group and its staff belonging to
trade unions, the Enlarged Group's operations could suffer an
interruption or shutdown that could have a material adverse effect
on its business, results of operations or financial condition.
Trade unions and/or other employee representatives must also be
notified of, and consulted with in relation to, all proposed
changes to terms or working conditions of employees of the Enlarged
Group.
There is no guarantee that either of the Call Options will be
exercised and therefore there is no guarantee that the acquisition
of the Deal 2 Target or the Deal 3 Target will complete. In the
event that either of the Call Options is not exercised a
significant break fee may become payable by the Company
The exercise of the UK Call Option and the Polish Call Option is
entirely at the Company's and Polish Purchaser's (as applicable)
discretion if the relevant conditions are met. The exercise of the
relevant Call Option is subject to the Conditions to the UK Call
Option and the Conditions to the Polish Call Option. There is
therefore no guarantee that either the Deal 2 Acquisition or Deal 3
Acquisition or both acquisitions will go ahead, or they may
complete later than expected or may not complete at all.
Investors should note that in a significant break fee of GBP25
million per Call Option may become payable should a Call Option not
be exercised.
The implications of either or both of Deal 2 or Deal 3 not
completing could also potentially weaken the strategic rationale
for the Acquisitions and the Enlarged Group's position in the
Northern Europe.
The exercise of the Polish Call Option is subject to Polish
Competition Office Clearance
The exercise by the Polish Purchaser of its option to enter into
the Polish SPA (subject to and conditional upon, among other
things, the Polish Carve Out being effected and the Polish
Purchaser exercising the Polish Call Option) and thereby to acquire
the Polish Target pursuant to the Polish SPA is conditional, inter
alia, receiving Polish Competition Office Clearance, for which the
Polish Purchaser will make the necessary filings with the Polish
Competition Office once the Polish Call Option is exercised and the
Polish SPA is executed. The Polish Competition Office will have one
month (provided it does not open Phase II review) to issue a
decision concerning the initial filings. However, the Polish
Competition Authority usually asks questions in respect of
submitted documentation (generally twice or more - depending on the
scope of information provided and on the person who is the case
handler) and such questions suspend the deadline to issue the
decision. The Company has not identified any overlapping markets in
Poland, therefore, the Board would expect competition clearance in
Poland to take approximately 60 to 90 days from filing. There is no
guarantee that the Polish Competition Office Clearance will be
forthcoming or be granted. In the event that Polish Competition
Office Clearance is not received the Polish Purchaser will not be
able to acquire the Polish Target.
There are risks associated with the UK Carve Out and the Polish
Carve Out
The Company and/or the Polish Purchaser shall not be entitled to
exercise its option to enter into the UK SPA and/or the Polish SPA,
if the relevant Carve Out is not completed. If the relevant Carve
Out is not completed the Deal 2 Acquisition and/or the Deal 3
Acquisition (as applicable) cannot be completed.
As part of the Carve Out, a variety of assets, including
contracts, employees and real estate need to transfer to the Deal 2
Target and the Deal 3 Target. As part of the due diligence process
conducted by the Company, the following particular risks have been
noted:
UK Carve Out
One customer contract to be included in the UK Carve Out
contains onerous terms and drafting that
does not accommodate novation, and therefore cannot be easily
carved out. As a result, the contract is likely to be needed to be
renegotiated to transfer to Deal 2 Target as part of the Carve
Out.
-- A relatively substantial portion of the revenue attributable
to the top customers of the Deal 2 Target is derived from
arrangements that are undocumented and/or on a spot basis. There is
no guarantee that those customers will continue to purchase goods
after the UK Carve Out, on the same terms or at all.
-- The Company has not been able to ascertain if there any title
restrictions on the properties included in the UK Carve Out. Title
restrictions could affect the transferability of properties
intended to be included in the UK Carve Out.
Polish Carve Out
-- Several material contracts to be include in the Polish Carve
Out are subject to public procurement laws which may not
accommodate novation. As a result, there is a risk that such
contracts cannot be carved out and transferred to Deal 3
Target.
-- A property in Poland, intended to be included in the Polish
Carve Out, is subject to plot division proceedings. Until the
completion of the plot division proceedings and issuance of a final
division decision the property cannot be included in the Polish
Carve Out.
Further, whilst the Company conducted due diligence, such as
legal, tax, financial and technical, with the objective of
identifying any material issues that may affect the completion of a
successful Carve Out, there can be no assurance that all such
issues have been identified.
Any failure to effectively manage environmental impact could
expose the Group to disruption, financial liabilities and
reputational damage which could have a material adverse effect on
its business, operating results, financial condition or
prospects
With a growing regulatory and wider stakeholder focus on
reducing the environmental impact of the Group's operations, the
Directors have set targets to improve the Group's impact in respect
of energy, carbon, water, waste and biodiversity. The Group closely
monitors compliance and seeks continued improvement. However, the
Group may fail, or be perceived as having failed, to meet those
targets, which could expose the Group to regulatory breaches,
financial penalties, disruption, clean-up costs and reputational
risk, any of which could have a material adverse effect on its
business, operating results, financial condition or prospects.
The Targets may be subject to legacy defined benefit pension
scheme liabilities
The German Target may be liable for legacy defined benefit
pension scheme liabilities due to changes in pensions legislation
and differing actuarial assumptions and accounting standards being
used to calculate pensions liabilities. Such changes could impose
significant costs and burdens on the Enlarged Group (the extent of
which cannot be predicted) both in terms of compliance and
potential penalties, liabilities and remediation.
RISKS RELATING TO THE ENLARGED GROUP AND ITS BUSINESS
The Enlarged Group's business may be adversely affected by
general economic, political and financial market conditions.
The Enlarged Group is dependent on the level of activity in its
end markets. Accordingly, the Enlarged Group will be susceptible to
any deterioration in UK, Ireland, Sweden, Finland, Norway, Germany,
Czech Republic and Polish economic conditions. This may be driven
from a deterioration in construction activity, the impact of
Government policy, increased interest rates, exchange rate
fluctuations, geopolitical conditions, volatility and/or price
increases in the global energy markets. Such changes in
macroeconomic and political conditions may substantially and
adversely affect the business, financial and operating performance
of the Enlarged Group or its key customers and suppliers.
Several macroeconomic factors influence the levels and growth of
construction and infrastructure spending activity, including
economic growth, demographic trends, the state of the housing
market, mortgage availability, mortgage interest rates, changes in
household income, inflation and Government policy.
Any potential adverse changes in the macroeconomic or political
climate, including short-term downturns, may result in the Enlarged
Group facing a decrease in demand for its products which may result
in reduces
sales volumes and/or pressure on average selling prices which
may lead to declining revenue and/or margins. Furthermore, any
failure to adequately utilise the Enlarged Group's production
capacity as a result of low levels of demand could adversely affect
its profitability. These factors, if they materialize, or if
difficult macroeconomic conditions occur, could have a material
adverse effect on the Enlarged Group's business, financial
condition, results of operations and prospects.
The operations of the Enlarged Group require permits, licences
and authorisations, in particular relating to environmental, health
and safety and planning permissions
The operations of the Enlarged Group require licences, permits,
planning permissions and consents and in some cases renewals of
existing licences and permits from various governmental
authorities. Certain Targets, and in particular the Irish Target,
will also require permits, licences and authorisations (including
in relation to environmental, planning and greenhouse gases)
following the change of control following the Acquisitions. There
is no guarantee that such authorisations will be forthcoming. In
this event, there is no guarantee that the Enlarged group will be
able to carry on the activities of the relevant Target Company as
currently carried on (if at all).
The Enlarged Group also requires appropriate planning
permissions to apply to the area of the Enlarged Group's
operations. Planning consents are required in order to extract the
Enlarged Group's mineral reserves and build and update the
construction and operation of plants. Planning applications can
take years to be determined and, consequently, planning permissions
can be costly to obtain and may ultimately not be successful. They
may also be challenged at a later date. The granting of planning
permissions normally attaches conditions on operating hours,
emissions, discharges, extraction limits, restoration etc which
members of the Enlarged Group must adhere to. They can be subject
to appeal from organisations, individuals and both national and
local lobby groups and ultimately to the public enquiry. There are
risks that applications are unsuccessful or are delayed at sites
where reserves become critical. Further the Enlarged Group's
ability to obtain, sustain or renew licences and permits and other
licences and permits that are required by it on applicable terms is
subject to changes in regulations and policies and to the
discretion of the applicable governmental authorities.
There is no guarantee that the Enlarged Group will obtain or be
granted or retain the requisite planning or permits and other
authorisations or be able to continue to comply with any ongoing
conditions or will not have enforcement action initiated against it
by a relevant government authority and therefore to carry on its
planned operations, which failure could have a material adverse
effect on parts of the Enlarged Group's business.
The Enlarged Group is subject to a broad range of laws,
regulations and standards
The Enlarged Group will be subject to a broad range of laws,
regulations and standards, including those relating to employment,
pensions, data protection, land and water use, planning, pollution,
greenhouse gases, protection of the public, protection of the
environment and the handling of waste materials, mineral
production, exports, taxes and other matters.
Future changes in applicable laws, regulations, standards and
changes in their enforcement or regulatory interpretation could
result in changes in legal requirements or in the terms of existing
permits or agreements applicable to the Enlarged Group or its
properties, which could have a material adverse impact on the
Enlarged Group's current operations and future projects. Any
changes in the laws of the countries in which the Targets and wider
Enlarged Group operates could materially affect not only the rights
and title to the interests held there but also their use and
operations. No assurance can be given that the governments of such
countries will not revoke or significantly alter the conditions of
the applicable permitting or authorisations, nor that such
authorisations will not be challenged or impugned by third parties.
In addition, such approvals are subject to change in various
circumstances and further authorisations may be required.
In particular, environmental regulations and standards are
becoming increasingly stringent. Existing and possible future
environmental legislation, regulations and actions could cause
significant expense, capital expenditures, restrictions and delays
in the Enlarged Group's activities, the extent of which cannot be
predicted and which may well be beyond the capacity of the Enlarged
Group to fund.
It is the Enlarged Group's policy to require that all of its
subsidiary undertakings, employees, suppliers and sub-contractors
comply with applicable laws, regulations and standards. However,
violations of such laws, regulations and standards, in particular
environmental laws, could result in restrictions on the operations
of the Enlarged Group's sites, damages, fines or other sanctions,
increased costs of compliance with potential reputational damage
and potential loss of future contracts.
The Enlarged Group is subject to wide ranging privacy and data
protection laws
The Enlarged Group is subject to laws relating to privacy rights
and data protection. Such laws govern the Enlarged Group's ability
to collect, use and transfer information relating to its employees
and business partners (both customers and suppliers). The Enlarged
Group must comply with strict data protection and privacy laws in
the European Union and certain other jurisdictions in which the
Enlarged Group operates. The Company has identified some potential
minor deficiencies in compliance by the Targets with applicable
data protection and privacy laws. There is therefore a risk that
data could be wrongfully appropriated, lost or disclosed, damaged
or processed in breach of privacy or data protection laws. As a
result, the Targetsmay be subject to claims from third parties
relating to the infringement of privacy rights or data protection
laws. The Targets could also be subject to investigative or
enforcement action by the Information Commissioner's Office in the
UK or similar regulatory authorities in other jurisdictions which
it operates. Any perceived or actual failure to comply with privacy
or data protection laws could therefore harm the Company's
reputation and deter new customers. Following completion of the
Acquisitions, the Company will be taking steps to address potential
areas of non-compliance and update its policies and procedures.
Mineral Resource and Mineral Reserve estimates and Nordkalk's
use of the United Nations Framework Classification (UNFC) Mineral
Resource and Mineral Reserve categorisation
The Enlarged Group's reported Resources are estimates based on
external geologist review of sites and geological data and consider
a range of assumptions. In addition, Resource estimates can be
based on limited sampling and consequently may be uncertain because
the samples may not be representative. There are numerous
uncertainties inherent in estimating Resources and Reserves,
including factors beyond the control of the Enlarged Group. The
estimation of Resources is a subjective process and the accuracy of
any such estimates is a function of the quality of available data
and of engineering and geological interpretation and judgment.
Results of drilling, material testing, production, evaluation of
mine plans and exploration activities subsequent to the date of any
estimate may justify revision (up or down) of such estimates. There
is no assurance that the entirety of the Resources can be
economically quarried. Mineral Reserves have more certainty and
consider non geological factors such as permitting, feasibility
assessments, yield, social and environmental factors. Lower market
prices, increased production costs, reduced recovery rates and
other factors may render parts of the Enlarged Group's Resources
unviable to exploit and may result in revision of its estimates
from time to time. Reserve data is not indicative of future results
of operations. If in the future, the Enlarged Group's actual
Resources and Reserves prove to be less than the current estimates,
other than as a result of depletion through production, the
Enlarged Group's results of operations and financial condition may
be materially and adversely affected. The Company and the Directors
cannot give any assurance that the estimated Reserves will be
recovered as the Enlarged Group proceeds through production or that
they will be recovered at the volume, grade and rates
estimated.
Furthermore, Nordkalk uses the United Nations Framework
Classification (UNFC) mineral Resource and mineral Reserve
categorisation and reporting standard over the more commonly-used
Committee for Mineral Reserves International Reporting Standards
(CRIRSCO) based disclosure standard for mineral Resource and
mineral Reserve estimates. The UNFC is a public domain standard
that has gained traction with European governments. The UNFC is
typically used for public reporting of national mineral inventories
and as a generic classification framework. If estimates of mineral
Reserves and mineral Resources are to be re--classified using the
more technically detailed CRIRSCO standard in the future, revised
modelling and planning will be required and may affect the
assessment of the minerals which may result in the downward
adjustment of available mineral Reserves.
The Enlarged Group is reliant on mineral Reserves to extract
limestone and any reduction to Reserves is likely to reduce the
economic life of a quarry until such time as additional Reserves
can be accessed, which could materially impact the longevity of the
Enlarged Group's operations at quarrying sites where there is both
a low level of Reserves and significant planned extraction
rates.
There is a put option in NKD Holding Oy's Shareholders'
Agreement
The shareholders' agreement relating to NKD Holding Oy contain a
put option on Nordkalk. At any time after 12 October 2032 (being
the fifteenth anniversary of the agreement's effective date of 12
October 2017) NKD Holding Oy's other shareholder, an Estonian
company named Debalma OÜ (which holds 49 per cent. of the issued
share capital of NKD Holding Oy) has the right to demand that
Nordkalk acquires the shares in NKD Holding Oy owned by Debalma OÜ,
at an option price which will be calculated pursuant to a mechanism
set out in the shareholders agreement.
Nordkalk AB is involved in a dispute with the Swedish state
which is ongoing
Nordkalk AB, Nordkalk's main operating subsidiary in Sweden, is
involved in a dispute with the Swedish state as claimant, in which
Nordkalk AB has claimed damages from the Swedish state in the
amount of SEK 2,368,379,000 (approximately GBP198 million). On 1
April 2020, Nordkalk AB filed a claim for compensation for economic
loss due to land use restrictions as a result of the Swedish
government's designation of a piece of land as environmentally
protected pursuant to a Natura 2000 decision (Nacka District Court
case no. M2296-20). The counterparty is the Swedish State, which is
represented by the Legal, Financial and Public Procurement Agency.
In June 2014, Nordkalk AB was granted a permit for limestone
quarrying on the company-owned property known as Bunge Ducker 1:64
(case no. M 366-13) by the Land and Environmental Court. The permit
allowed a maximum quarrying of 2.5Mtpa of limestone until the
limestone deposit on the property ends, which was expected to take
about 25 years. The permit decision was appealed. On 31 August
2015, before the Land and Environmental Court of Appeal had ruled
in the appealed case, the Government designated Bunge Ducker 1:64
(including the limestone deposit) as a Natura 2000 area. Within a
Natura 2000 area, biodiversity is considered worthy of protection
and no environmentally damaging interventions can be made. In a
judgment on 11 September 2018, the Land and Environment Court of
Appeal revoked the June 2014 permit with direct reference to the
fact that the alleged limestone quarry now was designated as a
Natura 2000 area according to the Government decision.
On 14 March 2023, the court made an award to Nordkalk in
compensation for the economic loss, of which a sum of c. SEK 188
million (c. GBP17 million) that is to be adjusted for inflation and
interest until payment is made, is receivable by the Existing Group
as its share. As announced on 6 April 2023, by the Company, the
State appealed the verdict and subsequently the Existing Group also
appealed. The Existing Group remains confident in the merits of its
case and will keep the markets informed of any further
developments.
There is uncertainty as to the impact on the Enlarged Group of
government spending
The Enlarged Group will be largely dependent on government
spending on improving public infrastructure, buildings and
services. Governments may decide to reduce present or future
investment in transport, health or other construction projects or
other areas in which the Enlarged Group can compete for work to
supply building materials to contractors. Any reduction in such
investment and funding may have an adverse effect on the Enlarged
Group's future revenues and profitability.
The Enlarged Group is active in a competitive industry
The industry in which the Enlarged Group operates is
competitive. The Enlarged Group will compete with other local and
international companies, including potentially larger competitors
with access to greater financial, technical and other resources
than the Company, which may give them a competitive advantage. In
addition, actual or potential competitors may be strengthened
through the acquisition of additional assets and interests and
competition could adversely affect the Company's ability to acquire
suitable additional assets in the future.
Many of the Enlarged Group's products are commodities that face
strong volume and price competition. Such products may also face
competition from substitute products, including new products, that
the Enlarged Group does not produce. A number of existing
competitors compete on range, price, quality and service and
potential new low-cost competitors may be attracted into the market
through increased demand. Increase in costs or prices; reliance on
key suppliers and key customers, including national merchants,
could impact supply and profitability. Competitive pressures from
local competitors in new markets the Enlarged Group is active in
post the Acquisitions could impact profitability and market share.
The Enlarged Group will have an expanded geographic footprint and
must maintain strong customer relationships to remain
competitive.
The Enlarged Group is subject to changes in energy prices and
costs of raw materials
Raw materials such as cement, bitumen, fuel, utilities and
explosives are sourced from other third party suppliers. Raw
material can be subject to limited availability and price
fluctuation. Factors such as currency fluctuations, production
prices, logistics, adverse weather conditions, social instability,
and force majeure events have the potential to disrupt, raw
material supplies and impact prices of the Enlarged Group's
principal sources of raw materials. Energy cost changes might have
an impact on average selling prices dependent upon inter alia the
Enlarged Group's ability to pass these changes on to customers.
Further certain businesses will continue to operate without the
benefit of internal hedging on CO2 costs.
Numerous factors could affect product prices, including supply
and demand
Market prices of the Enlarged Group's products and services
could be affected by numerous factors which are beyond the control
of the Enlarged Group, including local demand, national economic
and political events, international economic trends, inflation and
deflation, currency exchange fluctuation, speculative activity and
the political and economic conditions of the jurisdictions in which
SigmaRoc operates. The combined effect of these factors is
difficult to predict and an investment in the Company could be
affected adversely by changes in economic, political,
administrative, taxation or other regulatory factors, in any
jurisdiction in which the Enlarged Group may operate.
The Enlarged Group is reliant on third parties who may
default
The Enlarged Group is reliant on its supply chain, particularly
in relation to the supply energy, raw materials and delivery of
products to customers. If a contractor or supplier failed
financially or was responsible for late or inadequate delivery or
poor quality of materials then it could damage the relevant part of
the Enlarged Group's reputation and/or cause downtime and/or
delays; potentially incurring financial losses to the extent not
covered by the Enlarged Group's insurance or the suppliers
insurance.
The Board may be unable to find appropriate acquisition targets
and/or integrate future acquisitions
The Enlarged Group may acquire other assets if suitable
opportunities become available. Any future acquisition poses
integration and other risks which may affect the Enlarged Group's
results or operations. To the extent that suitable opportunities
arise, the Company may seek to expand its business through the
identification and acquisition of, or significant investments in,
complementary companies, assets, products and services. There can
be no assurance that the Company will identify suitable
acquisitions or opportunities, obtain the financing necessary to
complete and support such acquisitions or acquire businesses on
satisfactory terms, or that any business acquired will prove to be
profitable. In addition, the acquisition and integration of
independent companies can be complex, costly and time-consuming
involving a number of possible problems and risks, including
possible adverse effects on the Enlarged Group's operating results,
diversion of management's attention, failure to retain personnel,
failure to maintain customer service levels, disruption to
relationships with customers and other third parties, risks
associated with unanticipated events or liabilities and
difficulties in the assimilation of the operations, technologies,
systems, services and products of the acquired companies. No
assurance can be given that the Enlarged Group will be able to
manage future acquisitions profitably or to integrate such
acquisitions successfully without additional costs, delays or other
problems and any failure to achieve successful integration of such
acquisitions could have a material adverse effect on the results of
operations or financial condition of the Enlarged Group. If the
Enlarged Group is unable to attract and retain key officers,
managers and technical personnel to adequately effect any such
acquisitions and integration, the Enlarged Group's ability to
execute its business strategy successfully could be materially and
adversely affected. The current Directors and Management team have
experience of integration since inception and operate a
decentralised model, where often intensive and risky integration of
aspects such as IT systems into a single global solution are not
required.
The Enlarged Group is dependent on key and skilled personnel
The Enlarged Group's future success is substantially dependent
on the continued services and continuing contributions of its
Directors, senior management and other key personnel. In particular
the Enlarged Group is dependent on the continued employment and
performance of the Enlarged Group's management team. The loss of
the services of any of the Company's executive officers or other
key employees could have a material adverse effect on the Enlarged
Group's business.
The Enlarged Group's operations require individuals with a high
degree of technical and/or professional skills and experienced
equipment and quarrying trade professionals. The Enlarged Group may
encounter significant competition for qualified management and
skilled workers and will be in competition with other quarry
operations and other local industries. If the Enlarged Group is
unable to attract and retain an adequate number of skilled workers,
a decrease in productivity or an increase in costs may have an
adverse effect on the Enlarged Group's operations, results and its
financial condition.
The Enlarged Group may incur significant costs in the event of
unsuccessful transactions
There is a risk that the Enlarged Group may incur substantial
legal, financial and advisory expenses arising from unsuccessful
transactions which may include public offer and transaction
documentation, legal, accounting, operational and other due
diligence.
The Company may require future financing
The Company may need to seek additional sources of financing to
implement its growth strategy. There can be no assurance that the
Company will be able to raise those funds, whether on acceptable
terms or at all. Given that the Enlarged Group operates in a sector
which has potentially negative impacts upon the environment,
investment may be less readily available. If further financing is
obtained by issuing new equity securities other than on a pro rata
basis to existing Shareholders, the existing Shareholders may be
diluted and the new securities may carry rights, privileges and
preferences superior to the Ordinary Shares. The Company may seek
further debt finance to fund all or part of any future acquisition.
There can be no assurance that the Company will be able to raise
those debt funds, whether on acceptable terms or at all. If debt
financing is obtained, the Company's ability to raise further
finance and its ability to operate its business may be subject to
restrictions.
Following completion of the Acquisitions, the Enlarged Group
will have additional indebtedness. The Enlarged Group accordingly
will be required to service interest payments in respect of the
increased indebtedness. While not expected in the foreseeable
future, any failure to make payments when due could result in a
default under the relevant financing arrangement which could in
turn have a material adverse effect on the Enlarged Group's
business, financial condition, results of operation and
prospects.
The Company is subject to the risks and liabilities associated
with possible accidents, injuries or deaths on its properties
Quarrying, like many other extractive natural resource
industries, is subject to potential risks and liabilities due to
accidents that could result in serious injury or death. The impact
of such accidents could affect the profitability of the operations,
cause an interruption to operations, lead to a loss of licences and
permits, affect the reputation of the Company and its ability to
obtain further licences, damage community relations and reduce the
perceived appeal of the Company as an employer. There is no
assurance that the Company has been or will at all times be in full
compliance with all laws and regulations or hold, and be in full
compliance with, all required health and safety permits. The
potential costs and delays associated with compliance with such
laws, regulations and permits could prevent the Company from
proceeding with the development of a project or the operation or
further development of a project, and any non-compliance therewith
may adversely affect the Company's operations, financial condition
and results of operations. Amendments to current laws, regulations
and permits governing operations and activities of companies in
this sector, or more stringent implementation thereof, could have a
material adverse impact on the Company and cause increases in
expenses, capital expenditures or production costs, reduction in
levels of production at producing properties, delays in the
development of new quarrying properties, or increases in
abandonment costs.
The Enlarged Group may become involved in litigation
There can be no guarantee that the current or future actions of
the Enlarged Group will not result in litigation. The quarrying
industry, as with all industries, is subject to legal claims, both
with and without merit, in particular in relation to environmental
and health and safety liability and alleged product defects.
Defence and settlement costs can be substantial, even with respect
to claims that have no merit. Due to the inherent uncertainty of
the litigation process, there can be no assurance that the
resolution of any particular legal proceeding will not have an
adverse effect on the Enlarged Group's financial position or
results of operations.
The Enlarged Group may have to make claims under its insurance
and any insurance cover in place may not be adequate
CRH is of such a size that it operates a captive insurance
program. Accordingly the Directors have engaged the Company's
insurance broker to ensure placing of suitable insurance for the
Enlarged Group. After completion, the Directors believe that the
Enlarged Group will have a robust and suitable insurance cover but
recognise that a claim could be made against a group company which
exceeds the limits of insurance cover or is in respect of a matter
that is uninsurable. In those circumstances the Enlarged Group
could suffer financial loss.
The payment by the Enlarged Group's insurers of any insurance
claims may result in increases in the premiums payable by the
Enlarged Group for its insurance cover and adversely affect the
Enlarged Group's financial performance. In the future, some or all
of the Enlarged Group's insurance coverage may become unavailable
or prohibitively expensive.
Loss of IT systems
The Enlarged Group will be dependent on IT systems for the
delivery of its business which will be vulnerable to damage `or
interruption from flood, fire, power loss, telecommunications
failure, cyber attacks and similar events. Failure of these systems
could cause financial loss to the Enlarged Group as well as damage
to its brand and reputation. In addition, certain IT services are
currently provided to certain of the Targets, and in particular the
Irish Target, by entities in the wider CRH group - as such the
Company will need to source an appropriate third party supplier
once the Acquisitions are complete.
There may be exchange rate risks
The Fundraising Shares are priced in Sterling and will be quoted
and traded in Sterling. In addition, any dividends the Company may
pay will be declared and paid in sterling. Accordingly,
Shareholders resident in non-UK jurisdictions are subject to risks
arising from adverse movements in the value of their local
currencies against Sterling, which may reduce the value of the
Fundraising Shares, as well as that of any dividend paid.
GENERAL RISKS
Investment in AIM-listed securities
Investment in shares traded on AIM is perceived to involve a
higher degree of risk and be less liquid than investment in
companies whose shares are listed on the Official List. An
investment in the Ordinary Shares may be difficult to realise.
Prospective investors should be aware that the value of an
investment in the Company may go down as well as up and that the
market price of the Ordinary Shares may not reflect the underlying
value of the Company. Investors may therefore realise less than, or
lose all of, their initial investment.
Liquidity
There may not be sufficient liquidity in the market for the
Ordinary Shares in order for investors to sell their Ordinary
Shares.
The Ordinary Shares will be traded on AIM rather than the
Official List. It may be more difficult for an investor to realise
his or her investment in an AIM-quoted company than a company whose
securities are listed on the Official List. Whilst the Company is
applying for the admission of the Enlarged Share Capital to trading
on AIM, there can be no assurance that an active trading market
will develop, or if developed, that it will be maintained.
AIM is a market for emerging or smaller, growing companies and
may not provide the liquidity normally associated with the Official
List or other exchanges. The future success of AIM and liquidity in
the market
for the Ordinary Shares cannot be guaranteed. In particular, the
market for the Ordinary Shares may be, or may become, relatively
illiquid and therefore the Ordinary Shares may be or may become
difficult to sell.
An investment in the Company may not be suitable for all readers
of this announcement. Accordingly, investors are strongly advised
to consult an independent financial adviser authorised for the
purposes of FSMA.
Share price volatility
The trading price of the Ordinary Shares may be subject to wide
fluctuations in response to a range of events and factors, such as
variations in operating results, announcements of technological
innovations or new products and services by the Enlarged Group or
its competitors, changes in financial estimates and recommendations
by securities analysts, the share price performance of other
companies that investors may deem comparable to the Enlarged Group,
the general market perception of construction and materials
companies, news reports relating to trends in the Enlarged Group's
markets, legislative changes in the Enlarged Group's sector,
ESG-related investment trends, and other factors outside of the
Enlarged Group's control. Such events and factors may adversely
affect the trading price of the Ordinary Shares, regardless of the
performance of the Enlarged Group. Prospective investors should be
aware that the value of the Ordinary Shares could go down as well
as up and investors may therefore not recover their original
investment especially as the market in the Ordinary Shares may have
limited liquidity.
Dividends
The payment of dividends will depend on the Enlarged Group's
future acquisition strategy and available cash resources. The
Company does not have any current intentions to pay out dividends
in the short to medium term. The dividend policy should not be
construed as a dividend forecast. The Company's ability to pay
dividends will depend on the level of distributions, if any,
received from its operating subsidiaries. There can be no guarantee
that the Enlarged Group's objectives will be achieved, and it will
depend on the earnings and the Company's financial condition,
current and anticipated cash needs and such other factors as the
Directors consider appropriate. The Company's subsidiaries may
also, from time to time, be subject to restrictions or their
ability to make distributions, including any regulatory, fiscal and
other restrictions. If a dividend is paid in the future, any change
in the tax treatment of dividends or interest received by the
Company may reduce the level of yield received by Shareholders.
Share options
, The Company has issued share options to, amongst others,
certain Directors and employees. The Company may, in the future,
issue further share options to subscribe for new Ordinary Shares to
certain employees, Directors, senior management and consultants of
the Enlarged Group, including pursuant to the New Option Plan. The
exercise of any such share options and any warrants (should any be
granted in the future) would result in a dilution of the
shareholdings of other investors.
Taxation
Any change in the Company's tax status or in taxation
legislation could affect the Company's ability to provide returns
to Shareholders. Statements in this announcement concerning the
taxation of investors in Ordinary Shares are based on current tax
law and practice which is subject to change. The taxation of an
investment in the Company depends on the individual circumstances
of investors.
Forward looking statements
Historical facts, information gained from historical
performance, present facts, circumstances and information and
assumptions from all or any of these are not a guide to the future.
Statements as to the Enlarged Group's aims, targets, plans and
intentions and any other forward looking statement referred to or
contained herein are no more than that and do not comprise
forecasts. Any such forward looking statements are based on
assumptions and estimates and involve risks, uncertainties and
other factors which may cause the actual results, outcome,
financial condition, performance, achievements or findings of the
Enlarged Group to be materially different from any future results,
performances or achievements expressed or implied by such forward
looking statements.
It should be noted that the factors listed above are not
intended to be exhaustive and do not necessarily comprise all of
the risks to which the Enlarged Group is or may be exposed or all
those associated with an investment in the Company. In particular,
the Company's performance is likely to be affected by changes in
market and/or economic conditions, political, judicial, and
administrative factors and in legal, accounting, regulatory and tax
requirements in the areas in which it operates and holds its major
assets. There may be additional risks and uncertainties that the
Directors do not currently consider to be material or of which they
are currently unaware which may also have an adverse effect upon
the Enlarged Group.
If any of the risks referred to herein crystalise, the Enlarged
Group's business, financial condition, results or future operations
could be materially adversely affected. In such case, the price of
its Ordinary Shares could decline and investors may lose all or
part of their investment.
APPIX III - TERMS AND CONDITIONS OF THE PLACING
TERMS AND CONDITIONS OF THE PLACING
The terms and conditions contained in this announcement,
including this Appendix (together the "announcement") (the "Terms
and Conditions") and the information comprising this announcement
are restricted and are not for publication, release or
distribution, in whole or in part, directly or indirectly, in or
into the United States, Canada, Australia, New Zealand, the
Republic of South Africa, or Japan, or any other state or
jurisdiction in which such release, publication or distribution
would be unlawful. The Terms and Conditions and the information
contained herein is not intended to and does not contain or
constitute an offer of, or the solicitation of an offer to buy or
subscribe for, securities to any person in the United States,
Canada, Australia, New Zealand, the Republic of South Africa or
Japan, or any other state or jurisdiction in which such an offer
would be unlawful.
Important information for invited Placees only regarding the
Placing
Members of the public are not eligible to take part in the
Placing. This Announcement and the Terms and Conditions set out in
this announcement are for information purposes only and are
directed only at persons whose ordinary activities involve them
acquiring, holding, managing and disposing of investments (as
principal or agent) for the purpose of their business and who have
professional experience in matters relating to investments and are:
(1) if in member states ("Member States") of the European Economic
Area ("EEA") are "Qualified Investors" in such Member State ("EEA
Qualified Investor") within the meaning of Article 2l of the
Regulation (EU) 2017/1129 ("EU Prospectus Regulation"); and (2) if
in the United Kingdom are "Qualified Investors" in the United
Kingdom ("UK Qualified Investor") within the meaning of Article 21
of the Regulation (EU) 2017/1129 as it forms part of the law of
England and Wales by virtue of section 3 of the European Union
(Withdrawal) Act 2018 and as modified by or under domestic law ("UK
Prospectus Regulation") and who fall within the meaning of Article
19(5) of the Financial Services and Markets Act 2000 (Financial
Promotion) Order 2005, as amended (the "FPO"), and/or (ii) high net
worth companies, unincorporated associations or other bodies within
the meaning of Article 49(2)(a) to (d) of the FPO; and/or (iii)
persons to whom it may otherwise be lawfully communicated (each a
"Relevant Person"). No other person should act or rely on this
announcement and persons distributing this announcement must
satisfy themselves that it is lawful to do so. By accepting the
Terms and Conditions each Placee represents and agrees that it is a
Relevant Person. This announcement and the Terms and Conditions set
out herein must not be acted on or relied on by persons who are not
Relevant Persons. Any investment or investment activity to which
this announcement and the Terms and Conditions set out herein
relate is available only to Relevant Persons and will be engaged in
only with Relevant Persons. This Announcement does not itself
constitute an offer for sale or subscription of any securities in
the Company.
The Placing Shares have not been and will not be registered
under the US Securities Act, or under the applicable securities
laws of any state or other jurisdiction of the United States, and
may not be offered, sold, taken up, resold, transferred or
delivered, directly or indirectly, in or into the United States,
except pursuant to an applicable exemption from the registration
requirements of the US Securities Act and in compliance with the
securities laws of any relevant state or other jurisdiction of the
United States. There will be no public offering of the Placing
Shares in the United States. The Placing Shares are being offered
and sold (i) outside the United States in "offshore transactions"
in reliance on and in accordance with Regulation S ("Regulation S")
under the US Securities Act and (ii) inside the United States to a
limited number of persons reasonably believed to be "qualified
institutional buyers" ("QIBs") as defined in Rule 144A ("Rule
144A") under the US Securities Act in transactions exempt from the
registration requirements of the US Securities Act.
The Placing Shares have not been approved or disapproved by the
US Securities and Exchange Commission, any state securities
commission or other regulatory authority in the United States, nor
have any of the foregoing authorities passed upon or endorsed the
merits of the Placing or the accuracy or the adequacy of this
announcement. Any representation to the contrary is a criminal
offence in the United States.
This announcement is for information purposes only and does not
constitute an offer to sell or issue, or the solicitation of an
offer to buy or subscribe for, securities in the United States,
Canada, Australia, New Zealand, the Republic of South Africa,
Japan, or in any jurisdiction in which such offer or solicitation
is unlawful. This announcement is not for publication or
distribution in or into the United States, Canada, Australia, New
Zealand, the Republic of South Africa or Japan, nor in any country
or territory where to do so may contravene local securities laws or
regulations. The distribution of this announcement (or any part of
it or any information contained within it) in other jurisdictions
may be restricted by law and therefore persons into whose
possession this announcement (or any part of it or any information
contained within it) comes should inform themselves about and
observe any such restriction. Any failure to comply with these
restrictions may constitute a violation of the securities law of
any such jurisdictions. The Placing Shares have not been and will
not be registered under the US Securities Act nor under the
applicable securities laws of any state or other jurisdiction of
the United States or any province or territory of Canada,
Australia, New Zealand, the Republic of South Africa or Japan.
Accordingly, the Placing Shares may not be offered or sold directly
or indirectly in or into the United States, Canada, Australia, New
Zealand, the Republic of South Africa or Japan or to any resident
of the United States, Canada, Australia, New Zealand, the Republic
of South Africa or Japan.
Each Placee should consult with its own advisers as to legal,
tax, business, financial and related aspects of a purchase of
and/or subscription for the Placing Shares.
All offers of the Placing Shares in the United Kingdom or the
EEA will be made pursuant to an exemption from the requirement to
produce a prospectus under the UK Prospectus Regulation or the EU
Prospectus Regulation, as appropriate. In the United Kingdom, this
announcement is being directed solely at persons in circumstances
in which section 21(1) of the Financial Services and Markets Act
200 (the "FSMA") does not require the approval of the relevant
communication by an authorised person.
Each Placee will be deemed to have read and understood this
announcement in its entirety and to be making such offer on these
terms and conditions, and to be providing the representations,
warranties, acknowledgements and undertakings, contained in these
terms and conditions. In particular each such Placee represents,
warrants and acknowledges to each of the Company and the Joint
Bookrunners that:
(a) it is a Relevant Person (as defined above) and undertakes
that it will purchase and/or subscribe for, hold, manage or dispose
of any Placing Shares that are allocated to it for the purposes of
its business;
(b) it is acquiring the Placing Shares for its own account or
acquiring the Placing Shares for an account with respect to which
it has sole investment discretion and has the authority to make,
and does make the representations, warranties, indemnities,
acknowledgments, undertakings and agreements contained in this
announcement;
(c) in the case of any Placing Shares subscribed for by it as a
financial intermediary as that term is used in Article 5 of the EU
Prospectus Regulation or the UK Prospectus Regulation (as
applicable), any Placing Shares purchased and/or subscribed for by
it in the Placing will not be subscribed for and/or purchased on a
non-discretionary basis on behalf of, nor will they be subscribed
for and/or purchased with a view to their offer or resale to,
persons in a Member State or the United Kingdom other than EEA
Qualified Investors or UK Qualified Investors (as applicable), or
in circumstances which may give rise to an offer of securities to
the public other than an offer or resale in the United Kingdom or
in a Member State to UK Qualified Investors or EEA Qualified
Investors (as applicable), or in circumstances in which the prior
consent of the Joint Bookrunners has been given to each such
proposed offer or resale;
(d) where Placing Shares have been acquired by it on behalf of
persons in any member state of the EEA or the United Kingdom other
than EEA Qualified Investors or UK Qualified Investors (as
applicable), the offer of those Placing Shares to it is not treated
under the EU Prospectus Regulation or the UK Prospectus Regulation
as having been made to such persons;
(e) it understands (or if acting for the account of another
person, such person has confirmed that such person understands) the
resale and transfer restrictions set out in this announcement;
(f) if located outside of the United States, it is acquiring the
Placing Shares in an "offshore transaction" in reliance on and in
accordance with Regulation S; and
(g) if located in the United States, it is a QIB and will duly
execute a US investor representations letter and deliver the same
to one of the Joint Bookrunners or its affiliates as soon as
possible after confirmation of its allocation in the Placing and in
any event prior to settlement of the Placing Shares.
Persons (including, without limitation, nominees and trustees)
who have a contractual or other legal obligation to forward a copy
of this announcement, of which these terms and conditions form
part, should seek appropriate advice before taking any action.
None of the Joint Bookrunners, nor any of their affiliates,
agents, directors, officers or employees, make any representation
to any Placees regarding an investment in the Placing Shares.
Introduction
Each of the Joint Bookrunners may require a Placee to agree to
such further terms and/or conditions and/or give such additional
warranties and/or representations and/or undertakings as it (in its
absolute discretion) sees fit and/or may require any such Placee to
execute a separate placing letter (for the purposes of this
announcement, a "Placing Letter"). The terms of this announcement
will, where applicable, be deemed to be incorporated into that
Placing Letter.
Details of the Placing
The Joint Bookrunners have entered into the Placing Agreement
with the Company under which the Joint Bookrunners have agreed, on
the terms and subject to the conditions set out therein, and
undertaken to use their reasonable endeavours to procure, as the
Company's agents for the purpose of the Placing, subscribers for
the Placing Shares at the Placing Price.
The Placing is conditional upon, amongst other things, Admission
becoming effective, the Master Acquisition Agreement becoming
unconditional and the Placing Agreement not being terminated in
accordance with its terms, as detailed further below.
The Placing Shares are and will be credited as fully paid and
will rank pari passu in all respects with the existing issued
Ordinary Shares, including the right to receive all dividends and
other distributions (if any) declared, made or paid on or in
respect of the Ordinary Shares after the date of issue of the
Placing Shares to the relevant Placees.
Application for admission to trading
Application has been or will be made to the London Stock
Exchange for Admission of the Placing Shares to be issued pursuant
to the Placing and the re-admission of the Enlarged Share Capital
to trading on AIM.
The Placing and the Deal 1 Acquisition are inter-conditional and
are both subject to, inter alia, Shareholder approval at the
General Meeting. Should these conditions not be satisfied,
Admission will not occur.
It is anticipated that the Company currently expects to be in a
position to complete the Deal 1 Acquisition (and therefore for
Admission to occur) on or around 4 January 2024.
The Placing Shares will not be admitted to trading on any stock
exchange other than AIM.
No Prospectus
No offering document or prospectus has been or will be submitted
to be approved by the FCA or submitted to the London Stock Exchange
in relation to the Proposals and no such prospectus is required (in
accordance with the UK Prospectus Regulation and/or the EU
Prospectus Regulation) to be published and Placees' commitments
will be made solely on the basis of the information contained in
this announcement released by the Company today and subject to the
further terms set forth in the trade confirmation or contract note
to be provided to individual prospective Placees.
Each Placee, by accepting a participation in the Placing, agrees
that the content of this announcement and all other publicly
available information previously or simultaneously published by the
Company by notification to a Regulatory Information Service or
otherwise filed by the Company is exclusively the responsibility of
the Company and confirms that it has neither received nor relied on
any other information, representation, warranty, or statement made
by or on behalf of the Company, the Joint Bookrunners, or any other
person and none of the Company or the Joint Bookrunners or any of
their respective affiliates will be liable for any Placee's
decision to participate in the Placing based on any other
information, representation, warranty or statement which the
Placees may have obtained or received. Each Placee acknowledges and
agrees that it has relied on its own investigation of the business,
financial or other position of the Company in accepting a
participation in the Placing. Nothing in this paragraph should
exclude or limit the liability of any person for fraudulent
misrepresentation by that person.
Bookbuild
The Joint Bookrunners will today commence the bookbuilding
process in respect of the Placing (the "Bookbuild") to determine
demand by Placees for participation in the Placing. No commissions
will be paid to Placees or by Placees in respect of any Placing
Shares.
The Joint Bookrunners and the Company shall be entitled to
effect the Placing by such alternative method to the Bookbuild as
they may, in their absolute discretion, determine.
Participation in, and principal terms of, the Placing
1. Each of the Joint Bookrunners (whether through itself or any
of its affiliates) is arranging the Placing as placing agent and
broker of the Company for the purpose of each using its reasonable
endeavours to procure Placees at the Placing Price for the Placing
Shares.
2. Participation in the Placing will only be available to
persons who may lawfully be, and are, invited to participate by the
Joint Bookrunners. The Joint Bookrunners and/or their respective
affiliates may participate in the Placing as principals (and are
each entitled to enter bids as principal in the Bookbuild).
3. Completion of the Placing will be announced on a Regulatory
Information Service following completion of the Bookbuild.
4. To bid in the Bookbuild, Placees should communicate their bid
by telephone or in writing to their usual sales contact at any of
the Joint Bookrunners. Each bid should state the number of Placing
Shares for which the prospective Placee wishes to subscribe. Bids
may be scaled down by the Joint Bookrunners on the basis referred
to in paragraph 13 below.
5. A bid in the Bookbuild will be made on the terms and subject
to the conditions in this announcement and will be legally binding
on the Placee on behalf of which it is made and except with the
Joint Bookrunners' consent will not be capable of variation or
revocation after the time at which it is submitted. Each Placee
will also have an immediate, separate, irrevocable and binding
obligation, owed to the Company and the Joint Bookrunners, to pay
to them (or as the Joint Bookrunners may direct) in cleared funds
an amount equal to the product of the Placing Price and the number
of Placing Shares that such Placee has agreed to subscribe for and
the Company has agreed to allot and issue to that Placee. Each
prospective Placee's obligations will be owed to the Company and
the Joint Bookrunners.
6. The Bookbuild in respect of the Placing is expected to close
no later than 7.00 p.m. on 22 November 2023, but the Bookbuild may
be closed earlier or later at the discretion of the Joint
Bookrunners and the Company. The Joint Bookrunners may, in
agreement with the Company, accept bids, either in whole or in
part, that are received after the Bookbuild has closed.
7. This announcement gives details of the terms and conditions
of, and the mechanics of participation in, the Placing. No
commissions will be paid to Placees or by Placees in respect of any
Placing Shares.
8. Each Placee's commitment will be made solely on the basis of
the information set out in Announcement. By participating in the
Placing, each Placee will be deemed to have read and understood
these Terms and Conditions and the rest of this announcement in its
entirety and to be participating and making an offer for the
Placing Shares on these Terms and Conditions and to be providing
the representations, warranties and acknowledgements and
undertakings contained in these Terms and Conditions.
9. The Placing Price will be a fixed price of 47.5 pence per Placing Share.
10. An offer for Placing Shares, which has been communicated by
a prospective Placee to the Joint Bookrunners, shall not be capable
of withdrawal or revocation without the consent of the Joint
Bookrunners.
11. Each Placee's allocation will be confirmed to Placees orally
or in writing by the Joint Bookrunners as soon as practicable
following the close of the Bookbuild. The terms of this
announcement will be deemed incorporated by reference therein. The
oral or written confirmation to such Placee will constitute an
irrevocable legally binding commitment upon such person (who will
at that point become a Placee) in favour of the Joint Bookrunners
(as applicable), and the Company, under which it agrees to
subscribe for and/or acquire the number of Placing Shares allocated
to it at the Placing Price on the Terms and Conditions set out in
this announcement and in accordance with the Company's articles of
association. Except as required by law or regulation, no press
release or other announcement will be made by the Joint Bookrunners
or the Company using the name of any Placee (or its agent), in its
capacity as Placee (or agent), other than with such Placee's prior
written consent.
12. Each Placee will have an immediate, separate, irrevocable
and binding obligation, owed to the Joint Bookrunners (as agent for
the Company), as applicable, to pay in cleared funds immediately on
the settlement date, in accordance with the registration and
settlement requirements set out below, an amount equal to the
product of the Placing Price and the number of Placing Shares such
Placee has agreed to take up.
13. The Joint Bookrunners may choose to accept bids, either in
whole or in part, on the basis of allocations determined in
agreement with the Company and may scale down any bids for this
purpose on such basis as they may determine. The Joint Bookrunners
may also, notwithstanding paragraphs 4 and 5 above, and subject to
prior agreement with the Company, allocate Placing Shares after the
time of any initial allocation to any person submitting a bid after
that time. The Company reserves the right (upon agreement with the
Joint Bookrunners) to reduce or seek to increase the amount to be
raised pursuant to the Placing at its discretion.
14. Irrespective of the time at which a Placee's allocation
pursuant to the Placing is confirmed, settlement for all Placing
Shares under the Placing will be required to be made at the times
and on the basis explained below under "Registration and
Settlement".
15. All obligations under the Bookbuild and Placing will be
subject to fulfilment or (where applicable) waiver of, amongst
other things, the conditions referred to below under "Conditions of
the Placing" and to the Placing Agreement not being terminated on
the basis referred to below under "Right to terminate under the
Placing Agreement".
16. By participating in the Bookbuild, each Placee will agree
that its rights and obligations in respect of the Placing will
terminate only in the circumstances described below and will not be
capable of rescission or termination by the Placee.
17. To the fullest extent permissible by law, none of the
Company, the Joint Bookrunners, or any of their respective
affiliates shall have any liability to Placees (or to any other
person whether acting on behalf of a Placee or otherwise) under
these terms and conditions. In particular, none of the Company, the
Joint Bookrunners, or any of their respective affiliates shall have
any liability (including to the fullest extent permissible by law,
any fiduciary duties) in respect of the Joint Bookrunners' conduct
of the Bookbuild. Each Placee acknowledges and agrees that the
Company is responsible for the allotment of the Placing Shares to
the Placees, and none of the Joint Bookrunners, shall have any
liability to Placees for the failure of the Company to fulfil those
obligations.
18. The Joint Bookrunners shall, following consultation with,
and on approval of such allocations by, the Company, be entitled to
allocate Placing Shares at their respective discretions to Placees
in respect of their allocations of Placing Shares.
Conditions of the Placing
The Joint Bookrunners' obligations under the Placing Agreement
are conditional on, inter alia:
(a) the Company procuring that the Admission Document and the
Form of Proxy are sent to each Shareholder who is entitled to
receive notice of the General Meeting subject to such exceptions as
are permitted by the Companies Act and the Company's articles of
association;
(b) the Master Acquisition Agreement: (i) not having lapsed or
been terminated and (ii) having become unconditional in all
respects, (save for: (a) Admission and (b) any conditions relating
to the Placing Agreement having become unconditional or not having
terminated prior to Admission);
(c) the New Facilities becoming unconditional in all respects on
or prior to Admission (save for any conditionality relating to the
Placing Agreement and Admission);
(d) the Resolutions (other than the Resolution relating to the
New Option Plan) having been duly passed by the requisite majority
the General Meeting;
(e) the Company allotting, subject only to Admission, the
Placing Shares in accordance with the Placing Agreement; and
(f) Admission of the Placing Shares taking place not later than
8 a.m. on 4 January 2024 (or such later time and date not being
later than 8.30 a.m. on 18 January 2024 as may be agreed between
the Company and the Joint Bookrunners).
The Placing Agreement contains certain warranties and
representations from the Company and an indemnity from the Company
for the benefit of the Joint Bookrunners. The Placing Agreement
contains certain conditions to be satisfied (or, where permitted,
waived or extended in writing by the Joint Bookrunners) on or prior
to Admission, including there having been no material adverse
change, the warranties being true and accurate and not misleading
(in the opinion of the Joint Bookrunners) and the performance by
the Company of its obligations under the Placing Agreement.
None of the Company, the Directors, and the Joint Bookrunners
owes any fiduciary duty to any Placee in respect of the
representations, warranties, undertakings or indemnities in the
Placing Agreement.
If: (i) any of the conditions contained in the Placing
Agreement, including those described above, are not fulfilled or
waived by the Joint Bookrunners by the time or date where specified
(or such later time or date as the Company and the Joint
Bookrunners may agree), or (ii) the Placing Agreement is terminated
as described below, the Placing will lapse and the Placees' rights
and obligations hereunder in relation to the Placing Shares shall
cease and terminate at such time and each Placee agrees that no
claim can be made by the Placee in respect thereof.
The Joint Bookrunners may, in their respective absolute
discretion, waive, or extend the period for compliance with the
whole or any part of any of the Company's obligations in relation
to the conditions in the Placing Agreement, save that, inter alia,
the condition relating to the Master Acquisition Agreement being
unconditional and Admission taking place may not be waived and the
period for compliance with such conditions may not be extended. Any
such extension or waiver will not affect Placees' commitments as
set out in this announcement.
None of the Joint Bookrunners, nor the Company (as the case may
be) shall have any liability to any Placee (or to any other person
whether acting on behalf of a Placee or otherwise) in respect of
any decision they may make as to whether or not to waive or to
extend the time and/or date for the satisfaction of any condition
to the Placing nor for any decision they may make as to the
satisfaction of any condition or in respect of the Placing
generally and by participating in the Placing each Placee agrees
that any such decision is within the respective absolute
discretions of the Joint Bookrunners.
Right to terminate under the Placing Agreement
The Joint Bookrunners may, jointly or separately, in their
respective absolute discretions, at any time before Admission
terminate the Placing Agreement by giving notice to the Company
and/or the other as the case may be, in certain circumstances,
including, inter alia:
(a) in the opinion of any of the Joint Bookrunner(s)) (acting in
good faith), any of the warranties given by the Company to the
Joint Bookrunners are not true and accurate or have become
misleading (or would not be true and accurate or would be
misleading if they were repeated at any time before Admission) in
any material respect by reference to the facts subsisting at the
time when the notice referred to above is given; or
(b) in the opinion of any of the Joint Bookrunner(s) (acting in
good faith), the Company fails to comply with any of its
obligations under the Placing Agreement and that failure is
material in the context of the Proposals; or
(c) in the opinion of the relevant Joint Bookrunner(s) (acting
in good faith), there has been a breach of any provision(s) of the
Master Acquisition Agreement and/or the New Facilities which is
material in the context of the Proposals; or
(d) in the opinion of any of the Joint Bookrunner(s)(acting in
good faith), there has been a development or event (or any
development or event involving a prospective change of which the
Company is, or might reasonably be expected to be, aware) which
will or is likely to have a material adverse effect on the
operations, condition (financial, operational, legal or otherwise),
prospects, management, results of operations, financial position,
business or general affairs of the Company or the Group, or the
Enlarged Group respectively, whether or not foreseeable and whether
or not arising in the ordinary course of business; or
(e) there has been a change in national or international
financial, political, economic or stock market conditions (primary
or secondary); an incident of terrorism, outbreak or escalation of
hostilities, war, declaration of martial law or any other calamity
or crisis; a suspension or material limitation in trading of
securities generally on any stock exchange; any change in currency
exchange rates or exchange controls or a disruption of settlement
systems or a material disruption in commercial banking, in each
case as would be likely in the opinion of either of the Joint
Bookrunner(s) (acting in good faith) to materially prejudice the
success of the Placing.
The rights and obligations of the Placees shall terminate only
in the circumstances described in these Terms and Conditions and in
the Placing Agreement and will not be subject to termination by the
Placee or any prospective Placee at any time or in any
circumstances. By participating in the Placing, Placees agree that
the exercise by the Joint Bookrunners of any right of termination
or other discretion under the Placing Agreement shall be within the
absolute discretion of the Joint Bookrunners, and that it need not
make any reference to Placees and that it shall have no liability
to Placees whatsoever in connection with any such exercise or
decision not to exercise. Placees will have no rights against the
Joint Bookrunners, the Company, nor any of their respective af
liates, directors or employees under the Placing Agreement pursuant
to the Contracts (Rights of Third Parties) Act 1999 (as
amended).
Registration and settlement
Settlement of transactions in the Placing Shares (ISIN:
GB00BYX5K988) following Admission will take place within CREST.
Each Placee allocated Placing Shares in the Placing will be sent a
trade confirmation or contract note stating the number of Placing
Shares allocated to it at the Placing Price, the aggregate amount
owed by such Placee to the Joint Bookrunners (as agent for the
Company), as applicable, and settlement instructions. Each Placee
agrees that it will do all things necessary to ensure that delivery
and payment is completed in accordance with either the CREST or
certificated settlement instructions that it has in place with the
Joint Bookrunners.
The expected date of settlement in respect of the Placing Shares
will be communicated to you by the Joint Bookrunners (as the case
may be) and settlement will be in accordance with the instructions
set out in the trade confirmation.
Interest is chargeable daily on payments not received from
Placees on the due date in accordance with the arrangements set out
above at the rate of two percentage points above SONIA as
determined by the Joint Bookrunners.
Each Placee is deemed to agree that, if it does not comply with
these obligations, the Joint Bookrunners may sell any or all of the
Placing Shares allocated to that Placee on such Placee's behalf and
retain from the proceeds, for the Joint Bookrunners account and
benefit (as agent for the Company) as applicable, an amount equal
to the aggregate amount owed by the Placee plus any interest due.
The relevant Placee will, however, remain liable and shall
indemnify the Joint Bookrunners(as agent for the Company) as
applicable, on demand for any shortfall below the aggregate amount
owed by it and may be required to bear any stamp duty or stamp duty
reserve tax or securities transfer tax (together with any interest
or penalties) which may arise upon the sale of such Placing Shares
on such Placee's behalf. By communicating a bid for Placing Shares
to the Joint Bookrunners, each Placee confers on the Joint
Bookrunners all such authorities and powers necessary to carry out
any such sale and agrees to ratify and confirm all actions which
the Joint Bookrunners lawfully takes in pursuance of such sale.
If Placing Shares are to be delivered to a custodian or
settlement agent, Placees should ensure that the trade confirmation
or contract note is copied and delivered immediately to the
relevant person within that organisation.
Insofar as Placing Shares are registered in a Placee's name or
that of its nominee or in the name of any person for whom a Placee
is contracting as agent or that of a nominee for such person, such
Placing Shares should, subject as provided below, be so registered
free from any liability to UK stamp duty or stamp duty reserve tax
or securities transfer tax. Placees will not be entitled to receive
any fee or commission in connection with the Placing.
Representations, warranties and further terms
By participating in the Placing each Placee (and any person
acting on such Placee's behalf) irrevocably makes the following
representations, warranties, acknowledgements, agreements and
undertakings (as the case may be) to the Company and Joint
Bookrunners, namely that, each Placee (and any person acting on
such Placee's behalf):
1. represents and warrants that it has read and understood this
announcement, including this announcement, in its entirety and that
its subscription for and/or purchase of Placing Shares is subject
to and based upon all the terms, conditions, representations,
warranties, acknowledgements, agreements and undertakings and other
information contained in this announcement and herein and not in
reliance on any information given or any representations,
warranties or statements made at any time by any person in
connection with Admission, the Company, the Placing, the
Acquisition or otherwise, other than the information contained in
this announcement, and undertakes not to redistribute or duplicate
this announcement or any part of it;
2. acknowledges that the content of this announcement and, when
published, the Admission Document is exclusively the responsibility
of the Company, and that none of the Joint Bookrunners, nor their
respective affiliates or any person acting on either of their
behalves has or shall have any liability for any information,
representation or statement contained in this announcement and,
when published, the Admission Document or any information
previously or concurrently published by or on behalf of the
Company, and will not be liable for any Placee's decision to
participate in the Placing based on any information, representation
or statement contained in this announcement and, when published,
the Admission Document or otherwise. Each Placee further
represents, warrants and agrees that the only information on which
it is entitled to rely and on which such Placee has relied in
committing itself to acquire the Placing Shares is contained in
this announcement, such information being all that it deems
necessary to make an investment decision in respect of the Placing
Shares and that it has neither received nor relied on any other
information given or representations, warranties or statements made
by the Joint Bookrunners, the Company, or any of their respective
directors, officers or employees or any person acting on behalf of
any of them, or, if received, it has not relied upon any such
information, representations, warranties or statements (including
any management presentation that may have been received by any
prospective Placee or any material prepared by the research
department of any of the Joint Bookrunners, (the views of such
research departments not representing and being independent from
those of the Company and the respective corporate finance
departments of the Joint Bookrunners, and not being attributable to
the same)), and neither the Joint Bookrunners nor the Company will
be liable for any Placee's decision to accept an invitation to
participate in the Placing based on any other information,
representation, warranty or statement. Each Placee further
acknowledges and agrees that it has relied solely on its own
investigation of the business, financial or other position of the
Company in deciding to participate in the Placing and it will not
rely on any investigation that the Joint Bookrunners, their
affiliates or any other person acting on its or their behalf has or
may have conducted;
3. acknowledges that none of the Joint Bookrunners, the Company
nor any of their respective affiliates or any person acting on
behalf of any of them has provided it, and will not provide it,
with any material regarding the Placing Shares or the Company other
than this announcement; nor has it requested any of the Joint
Bookrunners, the Company, their respective affiliates or any person
acting on behalf of any of them to provide it with any such
information and acknowledge that they have read and understood this
announcement;
4. acknowledges that no offering document or prospectus has been
or will be prepared in connection with the Placing and it has not
received and will not receive a prospectus or other offering
document in connection with the Placing;
5. represents and warrants that it has neither received nor
relied on any confidential price sensitive information concerning
the Company in accepting this invitation to participate in the
Placing;
6. acknowledges that none of the Joint Bookrunners has any
duties or responsibilities to it, or its clients, similar or
comparable to the duties of "best execution" and "suitability"
imposed by the Conduct of Business Sourcebook in the FCA's Handbook
of Rules and Guidance and that none of the Joint Bookrunners, is
acting for them or their clients and that each of the Joint
Bookrunners will not be responsible for providing protections to it
or its clients;
7. has the funds available to pay in full for the Placing Shares
for which it has agreed to subscribe and/or purchase and that it
will pay the total amount due by it in accordance with the terms
set out in this announcement and, as applicable, as set out in the
trade settlement or the contract note on the due time and date;
8. acknowledges that the Joint Bookrunners, nor any of their
affiliates or any person acting on behalf of the Joint Bookrunners
or any such affiliate has or shall have any liability for this
announcement and, when published, the Admission Document, any
publicly available or filed information or any representation
relating to the Company, provided that nothing in this paragraph
excludes the liability of any person for fraudulent
misrepresentation made by that person;
9. acknowledges that none of the Joint Bookrunners, nor the
ultimate holding company of any of the Joint Bookrunners nor any
direct or indirect subsidiary undertakings of such holding company,
nor any of their respective directors and employees shall be liable
to Placees for any matter arising out of the Joint Bookrunners'
role as placing agent or otherwise in connection with the Placing
and that where any such liability nevertheless arises as a matter
of law each Placee will immediately waive any claim against any of
such persons which it may have in respect thereof;
10. understands, and each account it represents has been advised
that (i) the Placing Shares have not been and will not be
registered under the US Securities Act or under the securities laws
of any state or other jurisdiction of the United States and are
being offered in a transaction not involving any public offering in
the United States, (ii) the Placing Shares are being offered and
sold pursuant to Regulation S under the US Securities Act or in a
transaction exempt from or not subject to the registration
requirements under the US Securities Act; and (iii) the Placing
Shares may not be reoffered, resold, pledged or otherwise
transferred except in accordance with Regulation S under the US
Securities Act or pursuant to an exemption from or in a transaction
not subject to the registration requirements under the US
Securities Act;
11. if located outside of the United States, represents and
warrants that it, and any accounts it represents, (i) is, or at the
time the Placing Shares are acquired will be, outside the United
States and (ii) is acquiring the Placing Shares in an "offshore
transaction" in reliance on and in accordance with Regulation
S;
12. if located in the United States, represents and warrants
that it, and any accounts it represents (i) is a QIB and has
delivered a US investor letter and (ii) is acquiring the Placing
Shares for its own account, or for the account of another QIB, and
not with a view to any resale or distribution in violation of the
US securities laws;
13. is not subscribing for any Placing Shares as a result of (i)
any "directed selling efforts" as that term is defined in
Regulation S or (ii) any form of "general solicitation or general
advertising" within the meaning of Regulation D under the US
Securities Act;
14. will not distribute, forward, transfer or otherwise transmit
this announcement and, when published, the Admission Document, any
information contained within it or any other materials concerning
the Placing (including any electronic copies thereof), in or into
the United States;
15. acknowledges that any subscription for the Placing Shares
may involve tax consequences, and that the contents of this
announcement and, when published, the Admission Document do not
contain tax advice or information. The Placee acknowledges that it
must retain its own professional advisors to evaluate the tax,
financial and any and all other consequences of an investment in
the Placing Shares;
16. represents and warrants that it will notify any transferee
to whom it subsequently reoffers, resells, pledges or otherwise
transfers the Placing Shares of the foregoing restrictions on
transfer and resale;
17. unless otherwise specifically agreed in writing with the
Joint Bookrunners represents and warrants that neither it nor the
beneficial owner of such Placing Shares will be a resident of the
United States, Canada, Australia, New Zealand, Japan or the
Republic of South Africa or any other jurisdiction in which it is
unlawful to make or accept an offer to acquire the Placing
Shares;
18. acknowledges that the Placing Shares have not been and will
not be registered under the securities legislation of the United
States, Canada, Australia, New Zealand, Japan or the Republic of
South Africa or any other jurisdiction in which it is unlawful to
make or accept an offer to acquire the Placing Shares and, subject
to certain exceptions, may not be offered, sold, taken up,
renounced or delivered or transferred, directly or indirectly,
within those jurisdictions;
19. represents and warrants that the issue or transfer to it, or
the person specified by it for registration as holder, of Placing
Shares will not give rise to a liability under any of sections 67,
70, 93 or 96 of the Finance Act 1986 (depositary receipts and
clearance services) and that the Placing Shares are not being
acquired in connection with arrangements to issue depositary
receipts or to transfer Placing Shares into a clearance system;
20. represents and warrants that: (i) it has complied with its
obligations under the Criminal Justice Act 1993 and UK MAR; (ii) in
connection with money laundering and terrorist financing, it has
complied with its obligations under the Proceeds of Crime Act 2002
(as amended), the Terrorism Act 2000 (as amended), the Terrorism
Act 2006 and the Money Laundering, Terrorist Financing and Transfer
of Funds (Information on the Payer) Regulations 2017; and (iii) it
is not a person: (a) with whom transactions are prohibited under
the Foreign Corrupt Practices Act of 1977 (as amended) or any
economic sanction programmes administered by, or regulations
promulgated by, the Office of Foreign Assets Control of the US
Department of the Treasury; (b) named on the Consolidated List of
Financial Sanctions Targets maintained by HM Treasury of the United
Kingdom; or (c) subject to financial sanctions imposed pursuant to
a regulation of the European Union or a regulation adopted by the
United Nations (together, the "Regulations"); and, if making
payment on behalf of a third party, that satisfactory evidence has
been obtained and recorded by it to verify the identity of the
third party as required by the Regulations and has obtained all
governmental and other consents (if any) which may be required for
the purpose of, or as a consequence of, such purchase, and it will
provide promptly to the Joint Bookrunners such evidence, if any, as
to the identity or location or legal status of any person which the
Joint Bookrunners may request from it in connection with the
Placing (for the purpose of complying with such Regulations or
ascertaining the nationality of any person or the jurisdiction(s)
to which any person is subject or otherwise) in the form and manner
requested by the Joint Bookrunners on the basis that any failure by
it to do so may result in the number of Placing Shares that are to
be purchased by it or at its direction pursuant to the Placing
being reduced to such number, or to nil, as the Joint Bookrunners
may decide in their sole discretion;
21. represents and warrants that it is acquiring the Placing
Shares for its own account or acquiring the Placing Shares for an
account with respect to which it has sole investment discretion and
has the authority to make, and does make the representations,
warranties, indemnities, acknowledgments, undertakings and
agreements contained in this announcement;
22. if it is a financial intermediary, as that term is used in
Article 5 of the EU Prospectus Regulation or the UK Prospectus
Regulation (as applicable), represents and warrants that the
Placing Shares subscribed for and/or purchased by it in the Placing
will not be subscribed for and/or purchased on a non-discretionary
basis on behalf of, nor will they be acquired with a view to their
offer or resale to, persons in the United Kingdom or in a Member
State (as applicable) in circumstances which may give rise to an
offer to the public other than an offer or resale in the United
Kingdom or in a Member State to UK Qualified Investors or EEA
Qualified Investors, or in circumstances in which the prior consent
of the Joint Bookrunners has been given to each such proposed offer
or resale;
23. represents and warrants that it has not offered or sold and
will not offer or sell any Placing Shares to persons prior to
Admission except to persons whose ordinary activities involve them
acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their business or otherwise
in circumstances which have not resulted in, and which will not
result in, an offer to the public in the United Kingdom,
Switzerland or a Member State;
24. represents and warrants that it has only communicated or
caused to be communicated and will only communicate or cause to be
communicated any invitation or inducement to engage in investment
activity (within the meaning of section 21 of FSMA) relating to the
Placing Shares in circumstances in which section 21(1) of FSMA does
not require approval of the communication by an authorised
person;
25. represents and warrants that it has complied and will comply
with all applicable provisions of UK MAR with respect to anything
done by it in relation to the Placing Shares in, from or otherwise
involving, the United Kingdom or the EEA (as applicable);
26. unless otherwise specifically agreed with the Joint
Bookrunners in writing, represents and warrants that it is an EEA
Qualified Investor or a UK Qualified Investor;
27. if it is a UK Qualified Investor, represents and warrants
that it is a person: (i) who has professional experience in matters
relating to investments falling within Article 19(1) of the FPO; or
(ii) falling within Article 49(2)(A) to (D) ("High Net Worth
Companies, Unincorporated Associations, etc.") of the FPO; or (iii)
are persons to whom it may otherwise be lawfully communicated;
28. if the Placee is a natural person, such Placee is not under
the age of majority (18 years of age in the United Kingdom) on the
date of such Placee's agreement to subscribe for and/or purchase
Placing Shares under the Placing and will not be any such person on
the date that such subscription and/or purchase is accepted;
29. is aware of and acknowledges that it is required to comply
with all applicable provisions of FSMA with respect to anything
done by it in, from or otherwise involving, the United Kingdom;
30. represents and warrants that it and any person acting on its
behalf is entitled to subscribe for and/or acquire the Placing
Shares under the laws of all relevant jurisdictions and that it has
all necessary capacity and has obtained all necessary consents and
authorities and taken any other necessary actions to enable it to
commit to this participation in the Placing and to perform its
obligations in relation thereto (including, without limitation, in
the case of any person on whose behalf it is acting, all necessary
consents and authorities to agree to the terms set out or referred
to in this announcement) and will honour such obligations;
31. where it is subscribing for and/or acquiring Placing Shares
for one or more managed accounts, represents and warrants that it
is authorised in writing by each managed account: (a) to subscribe
for and/or acquire the Placing Shares for each managed account; (b)
to make on its behalf the representations, warranties,
acknowledgements, undertakings and agreements in this announcement,
of which this announcement forms part; and (c) to receive on its
behalf any investment letter relating to the Placing in the form
provided to it by the Joint Bookrunners;
32. undertakes that it (and any person acting on its behalf)
will make payment to the Joint Bookrunners for the Placing Shares
allocated to it in accordance with this announcement, including
this announcement, on the due time and date as will be notified to
it by the Joint Bookrunners, failing which the relevant Placing
Shares may be placed with other parties or sold as the Joint
Bookrunners may in their sole discretion determine and without
liability to such Placee and it will remain liable and will
indemnify the Joint Bookrunners on demand for any shortfall below
the net proceeds of such sale and the placing proceeds of such
Placing Shares and may be required to bear the liability for any
stamp duty or stamp duty reserve tax or security transfer tax
(together with any interest or penalties due pursuant to or
referred to in these terms and conditions) which may arise upon the
placing or sale of such Placee's Placing Shares on its behalf;
33. acknowledges that none the Joint Bookrunners, any of their
affiliates, or any person acting on behalf of the Joint Bookrunners
or any such affiliate, is making any recommendations to it,
advising it regarding the suitability of any transactions it may
enter into in connection with the Placing and that participation in
the Placing is on the basis that it is not and will not be treated
for these purposes as a client of the Joint Bookrunners and that
none of the Joint Bookrunners have any duties or responsibilities
to it for providing the protections afforded to their clients or
customers or for providing advice in relation to the Placing nor in
respect of any representations, warranties, undertakings or
indemnities contained in the Placing Agreement nor for the exercise
or performance of any of their rights and obligations thereunder
including any rights to waive or vary any conditions or exercise
any termination right;
34. undertakes that the person whom it specifies for
registration as holder of the Placing Shares will be (i) itself or
(ii) its nominee, as the case may be. None of the Joint Bookrunners
nor the Company will be responsible for any liability to stamp duty
or stamp duty reserve tax resulting from a failure to observe this
requirement. Each Placee and any person acting on behalf of such
Placee agrees to participate in the Placing and it agrees to
indemnify the Company and the Joint Bookrunners in respect of the
same;
35. acknowledges that these terms and conditions and any
agreements entered into by it pursuant to these terms and
conditions and any non-contractual obligations arising out of or in
connection with such agreement shall be governed by and construed
in accordance with the laws of England and Wales and it submits (on
behalf of itself and on behalf of any person on whose behalf it is
acting) to the exclusive jurisdiction of the English courts as
regards any claim, dispute or matter (including non-contractual
matters) arising out of any such contract, except that enforcement
proceedings in respect of the obligation to make payment for the
Placing Shares (together with any interest chargeable thereon) may
be taken by the Company and the Joint Bookrunners in any
jurisdiction in which the relevant Placee is incorporated or in
which any of its securities have a quotation on a recognised stock
exchange;
36. acknowledges that time shall be of the essence as regards to
its obligations pursuant to this announcement;
37. agrees that the Company and the Joint Bookrunners and their
respective affiliates and others will rely upon the truth and
accuracy of the foregoing representations, warranties,
acknowledgements and undertakings which are given to the Joint
Bookrunners on their own behalf and on behalf of the Company and
are irrevocable and are irrevocably authorised to produce this
announcement and, when published, the Admission Document, or a copy
thereof to any interested party in any administrative or legal
proceeding or official inquiry with respect to the matters covered
hereby;
38. agrees to indemnify on an on demand, after-tax basis and
hold, the Company and the Joint Bookrunners and their respective
affiliates harmless from any and all costs, claims, liabilities and
expenses (including legal fees and expenses) arising out of or in
connection with any breach of the representations, warranties,
acknowledgements, agreements and undertakings in this announcement
and further agrees that the provisions of this announcement shall
survive after completion of the Placing;
39. acknowledges that no action has been or will be taken by any
of the Company and/or the Joint Bookrunners or any person acting on
behalf of the Company or the Joint Bookrunners, that would, or is
intended to, permit a public offer of the Placing Shares in any
country or jurisdiction where any such action for that purpose is
required;
40. acknowledges that it is an institution that has knowledge
and experience in financial, business and international investment
matters as is required to evaluate the merits and risks of
subscribing for and/or acquiring the Placing Shares. It further
acknowledges that it is experienced in investing in securities of
this nature and in this sector and is aware that it may be required
to bear, and it, and any accounts for which it may be acting, are
able to bear, the economic risk of, and is able to sustain, a
complete loss in connection with the Placing. It has relied upon
its own examination and due diligence of the Company and its
associates taken as a whole, and the terms of the Placing,
including the merits and risks involved;
41. acknowledges that its commitment to subscribe for and/or
purchase Placing Shares on the terms set out herein and in the
trade confirmation or contract note will continue notwithstanding
any amendment that may in future be made to the terms of the
Placing and that Placees will have no right to be consulted or
require that their consent be obtained with respect to the
Company's conduct of the Placing;
42. acknowledges that the Joint Bookrunners, or any of their
affiliates acting as an investor for its own account may take up
shares in the Company and in that capacity may retain, purchase or
sell for its own account such shares and may offer or sell such
shares other than in connection with the Placing;
43. represents and warrants that, if it is a pension fund or
investment company, its subscription and/or purchase of Placing
Shares is in full compliance with all applicable laws and
regulation;
44. to the fullest extent permitted by law, it acknowledges and
agrees to the disclaimers contained in the announcement, including
this announcement;
45. acknowledges that the allocation of Placing Shares (in
respect of the Placing shall be determined by the Joint Bookrunners
after consultation with, and the approval of the Company (so far as
is practicable) and the Joint Bookrunners may scale back any
placing commitment on such basis as they, with the approval of the
Company, may determine (which may not be the same for each
Placee);
46. irrevocably appoints any Director and any director or duly
authorised employee or agent of the Joint Bookrunners to be its
agent and on its behalf (without any obligation or duty to do so),
to sign, execute and deliver any documents and do all acts, matters
and things as may be necessary for, or incidental to, its
subscription for and/or purchase of all or any of the Placing
Shares allocated to it in the event of its own failure to do
so;
47. the Company reserves the right to make inquiries of any
holder of the Placing Shares or interests therein at any time as to
such person's status under the US federal securities laws and to
require any such person that has not satisfied the Company that
holding by such person will not violate or require registration
under the US securities laws to transfer such Placing Shares or
interests in accordance with the Articles (as amended from time to
time);
48. if it is acting as a "distributor" (for the purposes of UK
MiFIR Product Governance Requirements):
(1) it acknowledges that the Target Market Assessment does not
constitute: (a) an assessment of suitability or appropriateness for
the purposes of Chapters 9A or 10A respectively of the FCA Handbook
Conduct of Business Sourcebook; or (b) a recommendation to any
investor or group of investors to invest in, or purchase, or take
any other action whatsoever with respect to the Placing Shares and
each distributor is responsible for undertaking its own target
market assessment in respect of the Placing Shares and determining
appropriate distribution channels;
(2) notwithstanding any Target Market Assessment undertaken it
confirms that, other than where it is providing an execution-only
service to investors, it has satisfied itself as to the appropriate
knowledge, experience, financial situation, risk tolerance and
objectives and needs of the investors to whom it plans to
distribute the Placing Shares and that it has considered the
compatibility of the risk/reward profile of such Placing Shares
with the end target market; and
(3) it acknowledges that the price of the Placing Shares may
decline and investors could lose all or part of their investment;
the Placing Shares offer no guaranteed income and no capital
protection; and an investment in the Placing Shares is compatible
only with investors who do not need a guaranteed income or capital
protection, who (either alone or in conjunction with an appropriate
financial or other adviser) are capable of evaluating the merits
and risks of such an investment and who have sufficient resources
to be able to bear any losses that may result therefrom; and
49. the Company and the Joint Bookrunners will rely upon the
truth and accuracy of the foregoing representations, warranties,
undertakings and acknowledgements. The Placee agrees to indemnify
on an on demand, after-tax basis and hold each of, the Company and
the Joint Bookrunners, and their respective affiliates harmless
from any and all costs, claims, liabilities and expenses (including
legal fees and expenses) arising out of any breach of the
representations, warranties, undertakings, agreements and
acknowledgements in this announcement.
The representations, warranties, acknowledgments and
undertakings contained in this announcement are given to the Joint
Bookrunners and the Company (as the case may be) and are
irrevocable and shall not be capable of termination in any
circumstances.
The agreement to settle a Placee's subscription and/or purchase
(and/or the subscription and/or purchase of a person for whom such
Placee is contracting as agent) free of stamp duty and stamp duty
reserve tax depends on the settlement relating only to a
subscription and/or purchase by it and/or such person direct from
the Company for the Placing Shares in question. Such agreement
assumes that the Placing Shares are not being subscribed for and/or
acquired in connection with arrangements to issue depositary
receipts or to transfer the Placing Shares into a clearance
service. If there are any such arrangements, or the settlement
relates to any other subsequent dealing in the Placing Shares,
stamp duty or stamp duty reserve tax may be payable, for which
neither the Company nor the Joint Bookrunners will be responsible,
and the Placee to whom (or on behalf of whom, or in respect of the
person for whom it is participating in the Placing as an agent or
nominee) the allocation, allotment, issue or delivery of Placing
Shares has given rise to such UK stamp duty or stamp duty reserve
tax undertakes to pay such UK stamp duty or stamp duty reserve tax
forthwith and to indemnify on an on demand, after-tax basis and to
hold harmless the Company and the Joint Bookrunners in the event
that any of the Company or the Joint Bookrunners has incurred any
such liability to UK stamp duty or stamp duty reserve tax. If this
is the case, each Placee should seek its own advice and notify the
Joint Bookrunners, accordingly.
In addition, Placees should note that they will be liable for
any stamp duty and all other stamp, issue, securities, transfer,
registration, documentary or other duties or taxes (including any
interest, fines or penalties relating thereto) payable outside the
UK by them or any other person on the subscription and/or purchase
by them of any Placing Shares or the agreement by them to subscribe
for and/or purchase any Placing Shares.
Each Placee, and any person acting on behalf of the Placee,
acknowledges that none of the Joint Bookrunners owes any fiduciary
or other duties to any Placee in respect of any representations,
warranties, undertakings or indemnities in the Placing
Agreement.
When a Placee or person acting on behalf of the Placee is
dealing with the Joint Bookrunners, any money held in an account
with the Joint Bookrunners on behalf of the Placee and/or any
person acting on behalf of the Placee will not be treated as client
money within the meaning of the rules and regulations of the FCA
made under the FSMA. The Placee acknowledges that the money will
not be subject to the protections conferred by the client money
rules. As a consequence, this money will not be segregated from the
Joint Bookrunners' money in accordance with the client money rules
and will be used by the Joint Bookrunners in the course of its own
business and the Placee will rank only as a general creditor of the
Joint Bookrunners.
All times and dates in this Admission Document may be subject to
amendment. The Joint Bookrunners shall notify the Placees and any
person acting on behalf of the Placees of any changes.
Past performance is no guide to future performance and persons
needing advice should consult an independent financial adviser.
Supply and disclosure of information
If the Joint Bookrunners or the Company or any of their agents
request any information about a Placee's agreement to subscribe for
and/or acquire Placing Shares under the Placing, such Placee must
promptly disclose it to them and ensure that such information is
complete and accurate in all respects.
Data protection
Each Placee acknowledges that it has been informed that,
pursuant to GDPR the Company and/or the Registrar will, hold
personal data (as defined in GDPR) relating to past and present
Shareholders. Personal data will be retained on record for a period
exceeding seven years after it is no longer used (subject to any
limitations on retention periods set out in applicable law). The
Registrar will process such personal data at all times in
compliance with GDPR and shall only process for the purposes set
out in the Company's privacy notice (the "Purposes") which is
available for consultation on the Company's website at
www.sigmaroc.com (the "Privacy Notice") which include to:
(a) process its personal data to the extent and in such manner
as is necessary for the performance of its obligations under its
respective service contracts, including as required by or in
connection with the Placee's holding of Placing Shares, including
processing personal data in connection with credit and anti-money
laundering checks on it;
(b) communicate with it as necessary in connection with its
affairs and generally in connection with its holding of Placing
Shares;
(c) comply with the legal and regulatory obligations of the Company and/or the Registrar; and
(d) process its personal data for the Registrar's internal administration.
Where necessary to fulfil the Purposes, the Company will
disclose personal data to:
(a) third parties located outside of the United Kingdom if
necessary for the Registrar to perform its functions, or when it is
within its legitimate interests, and in particular in connection
with the holding of Placing Shares; or
(b) its affiliates, the Registrar and their respective
associates, some of which may be located outside the United
Kingdom.
Any sharing of personal data between parties will be carried out
in compliance with the GDPR and as set out in the Privacy
Notice.
Becoming registered as a holder of Placing Shares, a person
becomes a data subject (as defined under GDPR). In providing the
Registrar with information, the Placee hereby represents and
warrants to the Company and the Registrar that: (i) it complies in
all material aspects with its data controller obligations under
GDPR, and in particular, it has notified any data subject of the
Purposes for which personal data will be used and by which parties
it will be used and it has provided a copy of the Privacy Notice;
and (ii) where consent is legally competent and/or required under
GDPR the Placee has obtained the consent of any data subject to the
Company, the Registrar and their respective affiliates and group
companies, holding and using their personal data for the Purposes
(including the explicit consent of the data subjects for the
processing of any sensitive personal data for the Purposes).
Each Placee acknowledges that by submitting personal data to the
Registrar (acting for and on behalf of the Company) where the
Placee is a natural person he or she has read and understood the
terms of the Privacy Notice.
Each Placee acknowledges that by submitting personal data to the
Registrar (acting for and on behalf of the Company) where the
Placee is not a natural person it represents and warrants that:
(a) it has brought the Privacy Notice to the attention of any
underlying data subjects on whose behalf or account the Placee may
act or whose personal data will be disclosed to the Company as a
result of the Placee agreeing to subscribe for and/or purchase
Placing Shares; and
(b) the Placee has complied in all other respects with all
applicable data protection legislation in respect of disclosure and
provision of personal data to the Company.
Where the Placee acts for or on account of an underlying data
subject or otherwise discloses the personal data of an underlying
data subject, he/she/it shall, in respect of the personal data it
processes in relation to or arising in relation to the Placing:
(a) comply with all applicable data protection legislation;
(b) take appropriate technical and organisational measures
against unauthorised or unlawful processing of the personal data
and against accidental loss or destruction of, or damage to the
personal data;
(c) if required, agree with the Company and the Registrar, the
responsibilities of each such entity as regards relevant data
subjects' rights and notice requirements; and
(d) immediately on demand, fully indemnify each of the Company
and the Registrar and keep them fully and effectively indemnified
against all costs, demands, claims, expenses (including legal costs
and disbursements on a full indemnity basis), losses (including
indirect losses and loss of profits, business and reputation),
actions, proceedings and liabilities of whatsoever nature arising
from or incurred by the Company and/or the Registrar in connection
with any failure by the Placee to comply with the provisions set
out above.
Miscellaneous
The rights and remedies of the Joint Bookrunners and the Company
under these terms and conditions are in addition to any rights and
remedies which would otherwise be available to each of them and the
exercise or partial exercise of one will not prevent the exercise
of others.
On application, if a Placee is an individual, that Placee may be
asked to disclose in writing or orally his nationality. If a Placee
is a discretionary fund manager, that Placee may be asked to
disclose in writing or orally the jurisdiction in which its funds
are managed or owned. All documents provided in connection with the
Placing will be sent at the Placee's risk. They may be sent by post
to such Placee at an address notified by such Placee to the Joint
Bookrunners .
Each Placee agrees to be bound by the Articles (as amended from
time to time) once the Placing Shares which the Placee has agreed
to subscribe for and/or acquire pursuant to the Placing have been
acquired by the Placee. The contract to subscribe for and/or
acquire Placing Shares under the Placing and the appointments and
authorities mentioned in this announcement will be governed by, and
construed in accordance with, the laws of England and Wales. For
the exclusive benefit of the Joint Bookrunners and the Company,
each Placee irrevocably submits to the jurisdiction of the courts
of England and Wales and waives any objection to proceedings in any
such court on the ground of venue or on the ground that proceedings
have been brought in an inconvenient forum. This does not prevent
an action being taken against a Placee in any other
jurisdiction.
In the case of a joint agreement to subscribe for and/or acquire
Placing Shares under the Placing, references to a Placee in these
terms and conditions are to each of the Placees who are a party to
that joint agreement and their liability is joint and several.
The Joint Bookrunners and the Company expressly reserve the
right to modify the Placing (including, without limitation, its
timetable and settlement) at any time before allocations are
determined. The Placing is subject to the satisfaction of the
conditions contained in the Placing Agreement and to the Placing
Agreement not having been terminated.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
ACQPPGACGUPWUQP
(END) Dow Jones Newswires
November 22, 2023 02:00 ET (07:00 GMT)
Sigmaroc (LSE:SRC)
Gráfica de Acción Histórica
De Abr 2024 a May 2024
Sigmaroc (LSE:SRC)
Gráfica de Acción Histórica
De May 2023 a May 2024